on 30-Jul-2017 (Sun)

Flashcard 1432325065996

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#cfa #cfa-level-1 #economics #microeconomics #reading-14-demand-and-supply-analysis-consumer-demand #section-4-the-opportunity-set #study-session-4
Question

Assuming a one-period model Warren has no reason not to spend all of his income so the weak inequality becomes a strict equality, as shown in Equation 4, because there would be no reason for Warren to save any of his income if there is “no tomorrow.”

Equation (4)

[...]
PBQB + PWQW = I

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not to spend all of his income so the weak inequality becomes a strict equality, as shown in Equation 4, because there would be no reason for Warren to save any of his income if there is “no tomorrow.” Equation (4)  <span>P B Q B + P W Q W = I <span><body><html>

Original toplevel document

4. THE OPPORTUNITY SET: CONSUMPTION, PRODUCTION, AND INVESTMENT CHOICE
the expenditure on wine does not exceed his income per time period. We can represent this income constraint (or budget constraint ) with the following expression: Equation (3)  P B Q B + P W Q W ≤ I <span>This expression simply constrains Warren to spend, in total, no more than his income. At this stage of our analysis, we are assuming a one-period model. In effect, then, Warren has no reason not to spend all of his income. The weak inequality becomes a strict equality, as shown in Equation 4, because there would be no reason for Warren to save any of his income if there is “no tomorrow.” Equation (4)  P B Q B + P W Q W = I From this equation, we see that if Warren were to spend all of his income only on bread, he could buy I/P B slices of bread. Or if he were to confine his expenditure to wi

Flashcard 1446853348620

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#cfa-level-1 #fra-introduction #reading-22-financial-statement-analysis-intro #study-session-7
Question
Financial analysis is the process of examining a company’s performance in the context of [...] in order to arrive at a decision or recommendation.
its industry and economic environment

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Financial analysis is the process of examining a company’s performance in the context of its industry and economic environment in order to arrive at a decision or recommendation.

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1. INTRODUCTION
Financial analysis is the process of examining a company’s performance in the context of its industry and economic environment in order to arrive at a decision or recommendation. Often, the decisions and recommendations addressed by financial analysts pertain to providing capital to companies—specifically, whether to invest in the company’s debt or equity securi

Flashcard 1448267615500

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#cfa-level-1 #economics #has-images #microeconomics #reading-15-demand-and-supply-analysis-the-firm #section-3-analysis-of-revenue-costs-and-profit #study-session-4

Question

Mathematically, AVC will be decreasing when [...]. The opposite occurs when [...]
marginal cost is less than average variable cost,

MC is greater than AVC.

The same relationship holds true for MC and ATC.

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d MC in the short run. The marginal cost curve intersects both the ATC and AVC at their respective minimum points. This occurs at points S and T, which correspond to Q AVC and Q ATC , respectively. Mathematically, when <span>marginal cost is less than average variable cost, AVC will be decreasing . The opposite occurs when MC is greater than AVC. The same relationship holds true for MC and ATC . ATC declines when MC is less than ATC. ATC increases as MC exceeds ATC

Flashcard 1613741296908

Tags
#cfa-level-1 #corporate-finance #understanding-cashflow-statements
Question
The major operating cash flows are

(1) cash received from customers,

(2) cash paid to [...] and [...]

(3) [...] and [...] received

(4) interest paid

(5) [...] paid.
(2) suppliers and employees

(3) interest and dividends

(5) income taxes

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Subject 1. Classification of Cash Flows and Non-Cash Activities
ate sufficient cash from its continuing operations. CFOs are derived by converting the income statement from an accrual basis to a cash basis. For most companies, positive operating cash flows are essential for long-run survival. <span>The major operating cash flows are (1) cash received from customers, (2) cash paid to suppliers and employees, (3) interest and dividends received, (4) interest paid, and (5) income taxes paid. Special items to note: Interest and dividend revenue, and interest expenses, are considered operating activities, but dividends paid are considered financing a

Flashcard 1613902253324

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#cfa-level-1 #corporate-finance #understanding-cashflow-statements
Question
Which section of the cashflow statement relate to the debt and the equity items on the balance sheet.
Financing Activities

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Subject 1. Classification of Cash Flows and Non-Cash Activities
iability and owner's equity items, and include: Obtaining capital from owners and providing them with a return on (and a return of) their investments. Borrowing money from creditors and repaying the amounts borrowed. <span>In general, the items in this section relate to the debt and the equity items on the balance sheet. Financing cash flows reflect how the company plans to finance its expansion and reward its owners. Examples: Dividends paid to stockholders (not interest paid

Flashcard 1635156626700

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#statistical-concepts-and-market-returns
Question

The sample mean or average is represented with the letter

$$\bar {X}$$ (read “X-bar”

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Flashcard 1635390721292

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Question
[...] scale consists of assigning items to groups or categories.
Nominal Scale

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Subject 2. Measurement Scales
or summarizing and analyzing data, we need to distinguish between different measurement scales or levels of measurement. Nominal Scale Nominal measurement represents the weakest level of measurement. It <span>consists of assigning items to groups or categories. No quantitative information is conveyed and no ordering (ranking) of the items is implied. Nominal scales are qualitative rather than quantitative. Religious preference, r

Flashcard 1636296166668

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Question
Is Bank discount yield a meaningful measure of the return on investment?
not

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Subject 4. Different Yield Measures of a U.S. Treasury Bill
unt basis D = the dollar discount, which is equal to the difference between the face value of the bill, F, and its purchase price, P t = the number of days remaining to maturity 360 = the bank convention of the number of days in a year. <span>Bank discount yield is not a meaningful measure of the return on investment because: It is based on the face value, not on the purchase price. Instead, return on investment should be measured based on cost of investment. It is annualized using a 360-day year, not a 365-day year. It annualizes with simple interest and ignores the effect of interest on interest (compound interest). Holding period yield (HPY) is the return earned by an investor if the money market instrument is held until maturity: P 0 =

Annotation 1637212622092

 #reading-9-probability-concepts Suppose the question is “What is the probability that the stock earns a return above the risk-free rate (event A)?” The answer is an unconditional probability that can be viewed as the ratio of two quantities. The numerator is the sum of the probabilities of stock returns above the risk-free rate. Suppose that sum is 0.70. The denominator is 1, the sum of the probabilities of all possible returns. The answer to the question is P(A) = 0.70. Now suppose we want to know the probability that the stock earns a return above the risk-free rate (event A), given that the stock earns a positive return (event B). With the words “given that,” we are restricting returns to those larger than 0 percent—a new element in contrast to the question that brought forth an unconditional probability. The conditional probability is calculated as the ratio of two quantities. The numerator is the sum of the probabilities of stock returns above the risk-free rate; in this particular case, the numerator is the same as it was in the unconditional case, which we gave as 0.70. The denominator, however, changes from 1 to the sum of the probabilities for all outcomes (returns) above 0 percent. Suppose that number is 0.80, a larger number than 0.70 because returns between 0 and the risk-free rate have some positive probability of occurring. Then P(A | B) = 0.70/0.80 = 0.875. If we observe that the stock earns a positive return, the probability of a return above the risk-free rate is greater than the unconditional probability, which is the probability of the event given no other information.

Flashcard 1641040448780

Tags
#statistical-concepts-and-market-returns
Question

The letter k represents [...]

an interval

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Annotation 1644413979916

 #reading-8-statistical-concepts-and-market-returns An important attribute of the standard deviation as a measure of spread is that if the mean and standard deviation of a normal distribution are known, it is possible to compute the percentile rank associated with any given score.

Subject 6. Measures of Dispersion
variance indicates the adequacy of the mean as representative of the population by measuring the deviation from expectation. Basically, the variance and the standard deviation are measures of the average deviation from the mean. <span>An important attribute of the standard deviation as a measure of spread is that if the mean and standard deviation of a normal distribution are known, it is possible to compute the percentile rank associated with any given score. In a normal distribution, about 68% of the scores are within one standard deviation of the mean and about 95% of the scores are within two standards deviations of the mean.

Annotation 1644446223628

 Chebyshev’s inequality holds for samples and populations and for discrete and continuous data regardless of the shape of the distribution.

Annotation 1644858313996

 #investopedia Antitrust laws prohibit a variety of practices that restrain trade. like price-fixing conspiracies, corporate mergers likely to reduce the competitive vigor of particular markets, and predatory acts designed to achieve or maintain monopoly power.

Antitrust
What is 'Antitrust' <span>Antitrust laws are the laws that apply to virtually all industries and to every level of business, including manufacturing, transportation, distribution and marketing. They prohibit a variety of practices that restrain trade. Examples of illegal practices are price-fixing conspiracies, corporate mergers likely to reduce the competitive vigor of particular markets, and predatory acts designed to achieve or maintain monopoly power. BREAKING DOWN 'Antitrust' Antitrust laws are necessary in an open marketplace. Competition among sellers gives consumers lower prices, higher-quali

Annotation 1644874829068

 #reading-9-probability-concepts The conditional probability of an event may be greater than, equal to, or less than the unconditional probability, depending on the facts.

Annotation 1645807537420

 To find a box-and-whisker plot of order data we find the median and, to divide the data into quarters, we then find the medians of these two halves.

;:"","st":"Khan Academy","th":126,"tu":"https://encrypted-tbn0.gstatic.com/images?q\u003dtbn:ANd9GcSn5LucwU2YqqP-QbKVKFxZQrH67dnFFkLdw7mMGEhss07jzQixQxdTCiUW","tw":224} <span>To create a box-and-whisker plot, we start by ordering our data (that is, putting the values) in numerical order, if they aren't ordered already. Then we find the median of our data. The median divides the data into two halves. To divide the data into quarters, we then find the medians of these two halves. Box-and-Whisker Plots - Purplemath www.purplemath.com/modules/boxwhisk.htm Feedback About this result People also ask What can you tell from a box and whisker plot?

Flashcard 1646434585868

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Question
For a random variable X, the expected value of X is denoted [...]
E(X).

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Subject 6. Expected Value, Variance, and Standard Deviation of a Random Variable
ed with probability, the expected value simply factors in the relative chances of each event occurring, in order to determine the overall result. The more probable outcomes will have a greater weighting in the overall calculation. <span>For a random variable X, the expected value of X is denoted E(X). E(X) = P(x 1 ) x 1 + P(x 2 ) x 2 + ... + P(x n ) x n In investment analysis, forecasts are frequently made using expected value, for example,

Flashcard 1646453460236

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Question
The [...] of a random variable is the expected value of squared deviations from the random variable's expected value.
variance

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Subject 6. Expected Value, Variance, and Standard Deviation of a Random Variable

Original toplevel document

Subject 6. Expected Value, Variance, and Standard Deviation of a Random Variable
fit that will be made the remaining 50% of the time more than offsets this and creates an overall expected profit. However, with a one-off concert, there is a major risk involved, particularly in the event of unfavorable weather. <span>An easier way to interpret expected value is as follows: If a number of such concerts were held, the organizers can expect to achieve a profit of \$14,000 for each concert. So expected values actually make more sense when viewed over the long run. The variance of a random variable is the expected value (the probability-weighted average) of squared deviations from the random variable's expected value. &

Flashcard 1646692535564

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#math-shit
Question
A stem-and-leaf graph, also called a stemplot, is a way to [...].
represent the distribution of numeric data

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A stem-and-leaf graph, also called a stemplot, is a way to represent the distribution of numeric data. It was invented by John Tukey, a mathematician, and is a quick way to picture data for numbers that are greater than 0.

Original toplevel document

Stem-and-leaf graph
A stem-and-leaf graph, also called a stemplot, is a way to represent the distribution of numeric data. It was invented by John Tukey, a mathematician, and is a quick way to picture data for numbers that are greater than 0. I'll explain using an example. Suppose you have the following set of numbers (they might represent the number of home runs hit by a major league baseball player during

Flashcard 1646695157004

Question
A [...] is a description of a system using mathematical concepts and language.
mathematical model

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A mathematical model is a description of a system using mathematical concepts and language.

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model+definition+mathematics - Buscar con Google
https://en.wikipedia.org/wiki/Mathematical_model","th":120,"tu":"https://encrypted-tbn0.gstatic.com/images?q\u003dtbn:ANd9GcSuTdVRcwZOxMfups7ajRrrK7-0wG9HlGQMOjH29i6tYgAjzXEg6rJKMUgH","tw":200} <span>A mathematical model is a description of a system using mathematical concepts and language. The process of developing a mathematical model is termed mathematical modeling. ... A model may help to explain a system and to study the effects of different components, and to make pr

Flashcard 1646697778444

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Question
A [...] scale describes a scale constructed so that equal intervals on the vertical scale represent equal rates of change, and equal intervals on the horizontal scale represent equal amounts of change.
semilogarithmic

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A semilogarithmic scale describes a scale constructed so that equal intervals on the vertical scale represent equal rates of change, and equal intervals on the horizontal scale represent equal amounts o

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