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#### Flashcard 1425589275916

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[...] deals with aggregate economic quantities, such as national output and national income.

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Macroeconomics deals with aggregate economic quantities, such as national output and national income.

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1. INTRODUCTION
In a general sense, economics is the study of production, distribution, and consumption and can be divided into two broad areas of study: macroeconomics and microeconomics. Macroeconomics deals with aggregate economic quantities, such as national output and national income. Macroeconomics has its roots in microeconomics , which deals with markets and decision making of individual economic units, including consumers and businesses. Microeconomics is a logi

#### Flashcard 1425695968524

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#cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4
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[...] , in economics, is the willingness and ability of consumers to purchase a given amount of a good or service at a given price.

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. Demand , in economics, is the willingness and ability of consumers to purchase a given amount of a good or service at a given price.

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3. BASIC PRINCIPLES AND CONCEPTS
In this reading, we will explore a model of household behavior that yields the consumer demand curve. Demand , in economics, is the willingness and ability of consumers to purchase a given amount of a good or service at a given price. Supply is the willingness of sellers to offer a given quantity of a good or service for a given price. Later, study on the theory of the firm will yield the supply curve.

#### Flashcard 1428204162316

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#cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 #summary
Question
The demand function represents buyers’ behavior and can be depicted (in its inverse demand form) as [...].
a negatively sloped demand curve

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The basic model of markets is the demand and supply model. The demand function represents buyers’ behavior and can be depicted (in its inverse demand form) as a negatively sloped demand curve. The supply function represents sellers’ behavior and can be depicted (in its inverse supply form) as a positively sloped supply curve. The interaction of buyers and sellers in a market

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SUMMARY
ay’s global economy, an understanding of the demand and supply model is essential for any analyst who hopes to grasp the implications of economic developments on investment values. Among the points made are the following: <span>The basic model of markets is the demand and supply model. The demand function represents buyers’ behavior and can be depicted (in its inverse demand form) as a negatively sloped demand curve. The supply function represents sellers’ behavior and can be depicted (in its inverse supply form) as a positively sloped supply curve. The interaction of buyers and sellers in a market results in equilibrium. Equilibrium exists when the highest price willingly paid by buyers is just equal to the lowest price willingly accepted by sellers. Goods markets are the interactions of consumers as buyers and firms as sellers of goods and services produced by firms and bought by households. Factor markets are the i

#### Flashcard 1428218318092

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#cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 #summary
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[...] are used by firms to sell debt or equity to raise long-term capital to finance the production of goods and services.

Capital markets

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s buyers and firms as sellers of goods and services produced by firms and bought by households. Factor markets are the interactions of firms as buyers and households as sellers of land, labor, capital, and entrepreneurial risk-taking ability. <span>Capital markets are used by firms to sell debt or equity to raise long-term capital to finance the production of goods and services. <span><body><html>

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SUMMARY
sloped supply curve. The interaction of buyers and sellers in a market results in equilibrium. Equilibrium exists when the highest price willingly paid by buyers is just equal to the lowest price willingly accepted by sellers. <span>Goods markets are the interactions of consumers as buyers and firms as sellers of goods and services produced by firms and bought by households. Factor markets are the interactions of firms as buyers and households as sellers of land, labor, capital, and entrepreneurial risk-taking ability. Capital markets are used by firms to sell debt or equity to raise long-term capital to finance the production of goods and services. Demand and supply curves are drawn on the assumption that everything except the price of the good itself is held constant (an assumption known as ceteris paribus or “hol

#### Flashcard 1428377439500

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#algebra-baldor
Question
Valor absoluto de una cantidad es [...]
el número que representa la can tidad prescindiendo del signo o sentido de la cantidad

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Valor absoluto de una cantidad es el número que representa la can tidad prescindiendo del signo o sentido de la cantidad, y valor relativo es el sentido de la cantidad, representado por el signo. Así, el valor absoluto de + $8 es$8, y el valor relativo haber, expre sado por e

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#### Flashcard 1430707113228

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#cfa #cfa-level-1 #economics #microeconomics #reading-14-demand-and-supply-analysis-consumer-demand #section-2-consumer-theory-from-preferences-to-demand-function #study-session-4-microeconomics-analysis
Question

[...] can be defined as the branch of microeconomics that relates [...] to consumer preferences.

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2. CONSUMER THEORY: FROM PREFERENCES TO DEMAND FUNCTIONS
ous characteristics and manifestations. In this reading, we address the foundations of demand and supply analysis and seek to understand the sources of consumer demand through the theory of the consumer, also known as consumer choice theory. <span>Consumer choice theory can be defined as the branch of microeconomics that relates consumer demand curves to consumer preferences. Consumer choice theory begins with a fundamental model of how consumer prefe

#### Flashcard 1430724939020

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#cfa #cfa-level-1 #economics #microeconomics #reading-14-demand-and-supply-analysis-consumer-demand #section-2-consumer-theory-from-preferences-to-demand-function #study-session-4-microeconomics-analysis
Question
In effect, consumer choice theory first models what the consumer would like to consume, and then it examines [...]
what the consumer can consume with limited income.

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In effect, consumer choice theory first models what the consumer would like to consume, and then it examines what the consumer can consume with limited income.

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2. CONSUMER THEORY: FROM PREFERENCES TO DEMAND FUNCTIONS
o goods (or two baskets of goods), both of which the consumer finds beneficial. Consumer choice theory then recognizes that to consume a set of goods and services, consumers must purchase them at given market prices and with a limited income. <span>In effect, consumer choice theory first models what the consumer would like to consume, and then it examines what the consumer can consume with limited income. Finally, by superimposing what the consumer would like to do onto what the consumer can do, we arrive at a model of what the consumer would do under various circumstances. Then by chang

#### Flashcard 1431565634828

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#cfa #cfa-level-1 #economics #microeconomics #reading-14-demand-and-supply-analysis-consumer-demand #section-3-utility-theory #study-session-4
Question

We can represent the utility function as

U=f(Qx1,Qx2,...,Qxn)

where the Qs are the quantities of [...].

each of the respective goods and services in the bundles

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In general, we can represent the utility function as Equation (1)  U=f(Qx1,Qx2,...,Qxn) where the Qs are the quantities of each of the respective goods and services in the bundles. In the case of two goods—say, ounces of wine (W) and slices of bread (B)—a utility function might be simply Equation (2)  U = f(W,B) = WB or the

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3. UTILITY THEORY: MODELING PREFERENCES AND TASTES
ferences. The number itself is referred to as the utility of that basket and is measured in utils , which are just quantities of happiness, or well-being, or whatever comes to mind such that more of it is better than less of it. <span>In general, we can represent the utility function as Equation (1)  U=f(Qx1,Qx2,...,Qxn) where the Qs are the quantities of each of the respective goods and services in the bundles. In the case of two goods—say, ounces of wine (W) and slices of bread (B)—a utility function might be simply Equation (2)  U = f(W,B) = WB or the product of the number of ounces of wine and the number of slices of bread. The utility of a bundle containing 4 ounces of wine along with 2 slices of bread would equal 8 utils, and it would rank lower than a bundle containing 3 ounces of wine along with 3 slices of bread, which would yield 9 utils. The important point to note is that the utility function is just a ranking of bundles of goods. If someone were to replace all those pieces of paper with new numbers that m

#### Flashcard 1435097238796

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#six-tips-for-working-with-the-brain #tip-2-focus-is-the-starting-point-of-learning
Question
The hippocampus can only hold about [...] of information before it must be processed and pushed into short-term memory.
20 minutes

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Here is the big shocker about the hippocampus: It can only hold so much information before it must be processed and pushed into short-term memory. Studies show that the maximum amount is about 20 minutes of information.

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r learning products. The brain structures that are involved in learning include the hippocampus, the amygdala, and the basal ganglia. To design the best learning experiences, we need to understand and respect the neuroscience of learning. <span>Tip #2: Focus is the starting point of learning The hippocampus is the part of the brain that takes in information and moves it to our memory. When it's damaged, people lose access to past memories and no longer can make new ones. The hippocampus acts like a recorder or data drive; like those devices, it has an "on" button. Physiologically, it's when our eyes and ears attune to something that causes the hippocampus to begin recording. Richard Davidson, from the University of Wisconsin, calls this "phase locking" and it's the starting point of all learning. As a result, we must design our learning environments to help people focus and we must bust the myth that you can multitask while learning. Research has proved that when we divide our attention, our focus switches back and forth between the two activities, also known as switch tasking. The hippocampus loses vital pieces of information for both of the things we were trying to attend to. I call this "Swiss tasking" because we end up with holes in the data the hippocampus was capturing and, therefore, holes in our learning that cannot be recovered. Here is the big shocker about the hippocampus: It can only hold so much information before it must be processed and pushed into short-term memory. Studies show that the maximum amount is about 20 minutes of information. Lecture-style sessions never have demonstrated good results for retention, and now we know why—it works against the brain's natural functioning. The good news is that many other learning activities can help. All the hippocampus needs is a few minutes of processing to push that data into short-term memory and it's ready again for more. I now build all my learning events in chunks of 15 min

#### Flashcard 1435760200972

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#2-1-3-economic-rent #2-1-types-of-profit-measures #cfa-level-1 #economics #microeconomics #reading-15-demand-and-supply-analysis-the-firm #section-2-objectives-of-the-firm #study-session-4
Question
From an analytical perspective, one can obtain industry supply data to calculate the [...] , which measures the sensitivity of quantity supplied to a change in price.

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From an analytical perspective, one can obtain industry supply data to calculate the elasticity of supply , which measures the sensitivity of quantity supplied to a change in price.

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2. OBJECTIVES OF THE FIRM
er competing firms to compete away any economic profit over the long run. Economic profit that exists over the long run is usually found where competitive conditions persistently are less than perfect in the market. <span>2.1.3. Economic Rent The surplus value known as economic rent results when a particular resource or good is fixed in supply (with a vertical supply curve) and market price is higher than what is required to bring the resource or good onto the market and sustain its use. Essentially, demand determines the price level and the magnitude of economic rent that is forthcoming from the market. Exhibit 1 illustrates this concept, where P 1 is the price level that yields a normal profit return to the business that supplies the item. When demand increases from Demand 1 to Demand 2 , price rises to P 2 , where at this higher price level economic rent is created. The amount of this economic rent is calculated as (P 2 – P 1 ) × Q 1 . The firm has not done anything internally to merit this special reward: It benefits from an increase in demand in conjunction with a supply curve that does not fully adjust with an increase in quantity when price rises. Exhibit 1. Economic Rent Because of their limited availability in nature, certain resources—such as land and specialty commodities—possess highly inelastic supply curves in both the short run and long run (shown in Exhibit 1 as a vertical supply curve). When supply is relatively inelastic, a high degree of market demand can result in pricing that creates economic rent. This economic rent results from the fact that when price increases, the quantity supplied does not change or, at the most, increases only slightly. This is because of the fixation of supply by nature or by such artificial constraints as government policy. How is the concept of economic rent useful in financial analysis? Commodities or resources that command economic rent have the potential to reward equity investors more than what is required to attract their capital to that activity, resulting in greater shareholders’ wealth. Evidence of economic rent attracts additional capital funds to the economic endeavor. This new investment capital increases shareholders’ value as investors bid up share prices of existing firms. Any commodity, resource, or good that is fixed or nearly fixed in supply has the potential to yield economic rent. From an analytical perspective, one can obtain industry supply data to calculate the elasticity of supply , which measures the sensitivity of quantity supplied to a change in price. If quantity supplied is relatively unresponsive ( inelastic ) to price changes, then a potential condition exists in the market for economic rent. A reliable forecast of changes in demand can indicate the degree of any economic rent that is forthcoming from the market in the future. When one is analyzing fixed or nearly fixed supply markets (e.g., gold), a fundamental comprehension of demand determinants is necessary to make rational financial decisions based on potential economic rent. EXAMPLE 1 Economic Rent and Investment Decision Making The following market data show the global demand, global supply, and price on an annual basis for gold over the period 2006–2008. Based on the data, what observation can be made about market demand, supply, and economic rent? Year 2006 2007 2008 Percent Change 2006–2008 Supply (in metric tons) 3,569 3,475 3,508 –1.7 Demand (in metric tons) 3,423 3,552 3,805 +11.2 Average spot price (in US$) 603.92 695.39 871.65 +44.3 Source: GFMS and World Gold Council. Solution: The amount of total gold supplied to the world market over this period has actually declined slightly by 1.7 percent during a period when there was a double-digit increase of 11.2 percent in demand. As a consequence, the spot price has dramatically increased by 44.3 percent. Economic rent has resulted from this market relationship of a relatively fixed supply of gold and a rising demand for it. 2.2. Comparison of Profit Measures All three types of profit are interconnected because, according to Equation 4, acco #### Flashcard 1436157349132 Tags #costs #finance #investopedia Question Implicit costs are not [...]in a financial system. Answer traceable status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it costs arise based on what has actually been purchased as opposed to implicit costs that arise based on what has actually been given up other than money. Explicit costs have a paper trail and provide audit documentation. Implicit costs are not <span>traceable in a financial system. While management will utilize explicit costs when viewing business operations, implicit costs are only utilized in decision-making or choosing between multiple alternatives. </sp #### Original toplevel document Explicit Cost Definition | Investopedia hased are examples of explicit costs. Although the depreciation of an asset is not an activity that can be tangibly traced, depreciation expense is an explicit cost because it relates to the cost of the underlying asset that the company owns. <span>Explicit Costs vs. Implicit Costs Explicit costs arise based on what has actually been purchased as opposed to implicit costs that arise based on what has actually been given up other than money. Explicit costs have a paper trail and provide audit documentation. Implicit costs are not traceable in a financial system. While management will utilize explicit costs when viewing business operations, implicit costs are only utilized in decision-making or choosing between multiple alternatives. Opportunity Costs Explicit costs are used in the computation of opportunity costs. An opportunity cost is the total value of an item forgone. It is calculated by adding the explicit and #### Flashcard 1438182935820 Tags #analyst-notes #cfa-level-1 #corporate-finance #introduction #reading-35-capital-budgeting Question • Replacement projects. Analysts also need to compare (3things) [...] before and after the replacement to identify changes in these elements. Answer revenue/cost/depreciation status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it he cash flows from the old asset must be considered in replacement decisions. Specifically, in a replacement project, the cash flows from selling old assets should be used to offset the initial investment outlay. Analysts also need to compare <span>revenue/cost/depreciation before and after the replacement to identify changes in these elements. Expansion projects. Projects concerning expansion into new products, services, or markets i #### Original toplevel document Subject 1. Capital Budgeting: Introduction ood capital budgeting decisions can be made). Otherwise, you will have the GIGO (garbage in, garbage out) problem. Improve operations, thus making capital decisions well-implemented. <span>Project classifications: Replacement projects. There are two types of replacement decisions: Replacement decisions to maintain a business. The issue is twofold: should the existing operations be continued? If yes, should the same processes continue to be used? Maintenance decisions are usually made without detailed analysis. Replacement decisions to reduce costs. Cost reduction projects determine whether to replace serviceable but obsolete equipment. These decisions are discretionary and a detailed analysis is usually required. The cash flows from the old asset must be considered in replacement decisions. Specifically, in a replacement project, the cash flows from selling old assets should be used to offset the initial investment outlay. Analysts also need to compare revenue/cost/depreciation before and after the replacement to identify changes in these elements. Expansion projects. Projects concerning expansion into new products, services, or markets involve strategic decisions and explicit forecasts of future demand, and thus require detailed analysis. These projects are more complex than replacement projects. Regulatory, safety and environmental projects. These projects are mandatory investments, and are often non-revenue-producing. Others. Some projects need special considerations beyond traditional capital budgeting analysis (for example, a very risky research project in which cash flows cannot be reliably forecast). LOS a. describe the capital budgeting process and distinguish among the various categories of capital projects; <span><body><html> #### Flashcard 1438268132620 Tags #analyst-notes #cfa-level-1 #corporate-finance #reading-35-capital-budgeting #study-session-10 Question Accounting income calculations reflect [...] and ignore [...] . Answer non-cash items the time value of money status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it Accounting profits only measure the return on the invested capital. Accounting income calculations reflect non-cash items and ignore the time value of money. They are important for some purposes, but for capital budgeting, cash flows are what are relevant. Economic income is an investme #### Original toplevel document Subject 2. Basic Principles of Capital Budgeting Capital budgeting decisions are based on incremental after-tax cash flows discounted at the opportunity cost of capital. Assumptions of capital budgeting are: Capital budgeting decisions must be based on cash flows, not accounting income. Accounting profits only measure the return on the invested capital. Accounting income calculations reflect non-cash items and ignore the time value of money. They are important for some purposes, but for capital budgeting, cash flows are what are relevant. Economic income is an investment's after-tax cash flow plus the change in the market value. Financing costs are ignored in computing economic income. Cash flow timing is critical because money is worth more the sooner you get it. Also, firms must have adequate cash flow to meet maturing obligations. The opportunity cost should be charged against a project. Remember that just because something is on hand does not mean it's free. See below for the definition of opportunity cost. Expected future cash flows must be measured on an after-tax basis. The firm's wealth depends on its usable after-tax funds. Ignore how the project is financed. Interest payments should not be included in the estimated cash flows since the effects of debt financing are reflected in the cost of capital used to discount the cash flows. The existence of a project depends on business factors, not financing. Important capital budgeting concepts: A sunk cost is a cash outlay that has already been incurred and which #### Flashcard 1438277569804 Tags #analyst-notes #cfa-level-1 #corporate-finance #reading-35-capital-budgeting #study-session-10 Question • Cash flow timing, besides TVM is critical because firms must [...] Answer have adequate cash flow to meet maturing obligations. status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it stment's after-tax cash flow plus the change in the market value. Financing costs are ignored in computing economic income. Cash flow timing is critical because money is worth more the sooner you get it. Also, firms must <span>have adequate cash flow to meet maturing obligations. The opportunity cost should be charged against a project. Remember that just because something is on hand does not mean it's free. See below for the definition of opport #### Original toplevel document Subject 2. Basic Principles of Capital Budgeting Capital budgeting decisions are based on incremental after-tax cash flows discounted at the opportunity cost of capital. Assumptions of capital budgeting are: Capital budgeting decisions must be based on cash flows, not accounting income. Accounting profits only measure the return on the invested capital. Accounting income calculations reflect non-cash items and ignore the time value of money. They are important for some purposes, but for capital budgeting, cash flows are what are relevant. Economic income is an investment's after-tax cash flow plus the change in the market value. Financing costs are ignored in computing economic income. Cash flow timing is critical because money is worth more the sooner you get it. Also, firms must have adequate cash flow to meet maturing obligations. The opportunity cost should be charged against a project. Remember that just because something is on hand does not mean it's free. See below for the definition of opportunity cost. Expected future cash flows must be measured on an after-tax basis. The firm's wealth depends on its usable after-tax funds. Ignore how the project is financed. Interest payments should not be included in the estimated cash flows since the effects of debt financing are reflected in the cost of capital used to discount the cash flows. The existence of a project depends on business factors, not financing. Important capital budgeting concepts: A sunk cost is a cash outlay that has already been incurred and which #### Flashcard 1438376135948 Tags #analyst-notes #cfa-level-1 #corporate-finance #reading-35-capital-budgeting #study-session-10 Question The firm's capital budget and [...] must be determined simultaneously to best allocate the firm's capital. Answer cost of capital status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it hen management places a constraint on the size of the firm's capital budget during a particular period. In such situations, capital is scarce and should be allocated to the projects most likely to maximize the firm's aggregate NPV. The firm's <span>capital budget and cost of capital must be determined simultaneously to best allocate the firm's capital. On the other hand, a firm can raise the funds it wants for all profitable projects simply by p #### Original toplevel document Subject 2. Basic Principles of Capital Budgeting In a non-conventional cash flow pattern, the initial outflow can be followed by inflows and/or outflows. <span>Some project interactions: Independent versus mutually exclusive projects. Mutually exclusive projects are investments that compete in some way for a company's resources - a firm can select one or another but not both. Independent projects, on the other hand, do not compete for the firm's resources. A company can select one or the other or both, so long as minimum profitability thresholds are met. Project sequencing. How does one sequence multiple projects over time, since investing in project B may depend on the result of investing in project A? Unlimited funds versus capital rationing. Capital rationing occurs when management places a constraint on the size of the firm's capital budget during a particular period. In such situations, capital is scarce and should be allocated to the projects most likely to maximize the firm's aggregate NPV. The firm's capital budget and cost of capital must be determined simultaneously to best allocate the firm's capital. On the other hand, a firm can raise the funds it wants for all profitable projects simply by paying the required rate of return. Learning Outcome Statements b. describe the basic principles of capital budgeting; c. explain how the evaluat #### Flashcard 1438590569740 Tags #analyst-notes #cfa-level-1 #corporate-finance #reading-35-capital-budgeting #study-session-10 Question Economic income is an investment's [...] plus the [...]. Answer after-tax cash flow change in the market value status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it ccounting income calculations reflect non-cash items and ignore the time value of money. They are important for some purposes, but for capital budgeting, cash flows are what are relevant. Economic income is an investment's <span>after-tax cash flow plus the change in the market value. Financing costs are ignored in computing economic income. <span><body><html> #### Original toplevel document Subject 2. Basic Principles of Capital Budgeting Capital budgeting decisions are based on incremental after-tax cash flows discounted at the opportunity cost of capital. Assumptions of capital budgeting are: Capital budgeting decisions must be based on cash flows, not accounting income. Accounting profits only measure the return on the invested capital. Accounting income calculations reflect non-cash items and ignore the time value of money. They are important for some purposes, but for capital budgeting, cash flows are what are relevant. Economic income is an investment's after-tax cash flow plus the change in the market value. Financing costs are ignored in computing economic income. Cash flow timing is critical because money is worth more the sooner you get it. Also, firms must have adequate cash flow to meet maturing obligations. The opportunity cost should be charged against a project. Remember that just because something is on hand does not mean it's free. See below for the definition of opportunity cost. Expected future cash flows must be measured on an after-tax basis. The firm's wealth depends on its usable after-tax funds. Ignore how the project is financed. Interest payments should not be included in the estimated cash flows since the effects of debt financing are reflected in the cost of capital used to discount the cash flows. The existence of a project depends on business factors, not financing. Important capital budgeting concepts: A sunk cost is a cash outlay that has already been incurred and which #### Flashcard 1439773101324 Tags #cfa-level-1 #microeconomics #monopolistic-competition #reading-16-the-firm-and-market-structures #section-2-analysis-of-mkt-structures #study-session-4 Question The competitive characteristic in Monopolistic competition is [...]. Answer a notably large number of firms The seller can convince consumers that its product is uniquely different from others then the seller can exercise some degree of pricing power over the market. status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it hamberlin (US) and Joan Robinson (UK), identified this hybrid market and came up with the term because there are strong elements of competition in this market structure and also some monopoly-like conditions. The competitive characteristic is <span>a notably large number of firms, while the monopoly aspect is the result of product differentiation. That is, if the seller can convince consumers that its product is uniquely different from other, similar products, t #### Original toplevel document 2. ANALYSIS OF MARKET STRUCTURES apital). This does not mean that all perfectly competitive industries are doomed to extinction by a lack of profits. On the contrary, millions of businesses that do very well are living under the pressures of perfect competition. <span>Monopolistic competition is also highly competitive; however, it is considered a form of imperfect competition. Two economists, Edward H. Chamberlin (US) and Joan Robinson (UK), identified this hybrid market and came up with the term because there are strong elements of competition in this market structure and also some monopoly-like conditions. The competitive characteristic is a notably large number of firms, while the monopoly aspect is the result of product differentiation. That is, if the seller can convince consumers that its product is uniquely different from other, similar products, then the seller can exercise some degree of pricing power over the market. A good example is the brand loyalty associated with soft drinks such as Coca-Cola. Many of Coca-Cola’s customers believe that their beverages are truly different from and better than all other soft drinks. The same is true for fashion creations and cosmetics. The oligopoly market structure is based on a relatively small number of firms supplying the market. The small number of firms in the market means that each firm must cons #### Flashcard 1442645937420 Tags #six-tips-for-working-with-the-brain Question The brain structures that are involved in learning include the hippocampus, [...], and the basal ganglia. Answer the amygdala status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it The brain structures that are involved in learning include the hippocampus, the amygdala, and the basal ganglia. To design the best learning experiences, we need to understand and respect the neuroscience of learning. #### Original toplevel document Unknown title what I learned really changed how I approach training design and delivery. Some of the studies confirmed things I had learned through trial and error long ago, and others completely shifted how I approached my craft. Here are six takeaways. <span>Tip #1: Work with the brain Different parts of the brain play core roles in how a person first learns information, then stores that information into memory, and finally uses that learning to create real and lasting behavior change. If we don't work with the brain and its natural processes, even the most popular or highly rated programs won't deliver in the long run. It is imperative that talent development professionals keep their finger on the pulse of brain science. As researchers learn more about how the brain and nervous system work, it will only enhance the quality of our learning products. The brain structures that are involved in learning include the hippocampus, the amygdala, and the basal ganglia. To design the best learning experiences, we need to understand and respect the neuroscience of learning. Tip #2: Focus is the starting point of learning The hippocampus is the part of the brain that takes in information and moves it to our memory. When it's damaged, people lose access #### Flashcard 1442933771532 Tags #costs #finance #investopedia Question Economic profit is the total return a company receives based on all costs incurred to attain that revenue. These costs include [...] Answer all explicit and implicit costs. status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it Economic profit is the total return a company receives based on all costs incurred to attain that revenue. These costs include all explicit and implicit costs. #### Original toplevel document Explicit Cost Definition | Investopedia actually purchased. An implicit cost is the greatest benefit that could have resulted from the use of the funds. This cost could reflect a different vehicle that could have been purchased or the benefit gained from using the funds elsewhere. <span>Economic Profit Explicit costs are also utilized in the calculation of economic profit. Economic profit is the total return a company receives based on all costs incurred to attain that revenue. These costs include all explicit and implicit costs. Economic profit is utilized for long-term decision-making. Economic profit is used extensively to determine whether a business should enter or exit a market or industry. #### Flashcard 1448573275404 Tags #analyst-notes #cfa-level-1 #fra-introduction #reading-22-financial-statement-analysis-intro #study-session-7 Question The four principal financial statements are: • Income statement ([...]) • Balance sheet (statement of [...] ) • Cash flow statement • Statement of changes in owners' or stockholders' equity Answer statement of earnings financial position status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it The four principal financial statements are: Income statement (statement of earnings) Balance sheet (statement of financial position) Cash flow statement Statement of changes in owners' or stockholders' equity #### Original toplevel document Subject 2. Major Financial Statements ad>Financial statements are the most important outcome of the accounting system. They communicate financial information gathered and processed in the company's accounting system to parties outside the business. The four principal financial statements are: Income statement (statement of earnings) Balance sheet (statement of financial position) Cash flow statement Statement of changes in owners' or stockholders' equity These four financial statements, augmented by footnotes and supplementary data, are interrelated. In addition, there are other sources of financial i #### Flashcard 1451164830988 Tags #conversation-tactics #how-to-take-a-complement Question Making someone feel [...] and [...] is the carpool lane to deeper friendships. Answer validated heard status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it Making someone feel validated and heard is the carpool lane to deeper friendships, especially when you combine it with humor. #### Original toplevel document How the dude charmed his enemy st a bit of awareness and effort. Next, I needed to befriend him and become more than an acquaintance. If I could get into his inner circle, I could get that same type of snarky argumentation on my side, and that could be valuable. <span>Making someone feel validated and heard is the carpool lane to deeper friendships, especially when you combine it with humor. Finally, I learned to defend myself from the extraneous and often off-base accusations and arguments he was making. Along with making sure that I was heard and people didn’t #### Flashcard 1451508763916 Question How do you graciously accept the compliment? [...] Answer You compliment it! status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it ing it. In other words, you’ll be a Negative Nancy (or Depressing Dan) and like attracts like. So assuming that you have internalized the possibility of positivity coming into your life, how do you graciously accept the compliment? <span>You compliment it!<span><body><html> #### Original toplevel document (pdf) cannot see any pdfs #### Flashcard 1452573330700 Tags #conversation-tactics Question The first step is to observe the [...] someone uses. Answer vocabulary and vernacular status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it The first step is to observe the vocabulary and vernacular someone uses. #### Original toplevel document (pdf) cannot see any pdfs #### Flashcard 1453311790348 Tags #conversation-tactics Question You have to project the illusion of [...] regardless of how you feel internally sometimes Answer respect It doesn’t matter if you think someone hasn’t earned it status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it when it comes to getting along with people, it doesn’t really matter if you think someone hasn’t earned your respect or doesn’t deserve respect any at all. You have to project the illusion of respect regardless of how you feel internally sometimes #### Original toplevel document (pdf) cannot see any pdfs #### Flashcard 1453325946124 Tags #conversation-tactics Question When people have the spotlight, their goal is usually to [...] from others. Answer feel heard and gain validation status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it So when people have the spotlight, their goal is usually to feel heard and gain validation from others. #### Original toplevel document (pdf) cannot see any pdfs #### Flashcard 1453644713228 Tags #conversation-tactics Question it’s commonly held that people like to talk about themselves, this is kind of truth but the real deal is [...] Answer feeling heard and like they matter. status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it phere of conversation advice, it’s commonly held that people like to talk about themselves. This is undeniably true. But I’ll add an addendum in the context of this chapter – people aren’t so much interested in talking about themselves as <span>feeling heard and like they matter.<span><body><html> #### Original toplevel document (pdf) cannot see any pdfs #### Flashcard 1455306968332 Question Free cash flow (FCF) is a measure of a company's [...] Answer financial performance status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it What is 'Free Cash Flow - FCF' Free cash flow (FCF) is a measure of a company's financial performance, calculated as operating cash flow minus capital expenditures. FCF represents the cash that a company is able to generate after spending the money required to maintain or expand its ass #### Original toplevel document Free Cash Flow - FCF Definition | Investopedia <span>What is 'Free Cash Flow - FCF' Free cash flow (FCF) is a measure of a company's financial performance, calculated as operating cash flow minus capital expenditures. FCF represents the cash that a company is able to generate after spending the money required to maintain or expand its asset base. FCF is important because it allows a company to pursue opportunities that enhance shareholder value. BREAKING DOWN 'Free Cash Flow - FCF' FCF is an assessment of the amount of cash a company generates after accounting for all capital expenditures, su #### Flashcard 1471283072268 Tags #cfa-level-1 #corporate-finance #reading-36-cost-of-capital Question A company’s optimal capital budget is found where the investment opportunity schedule [...] Answer intersects with the company’s marginal cost of capital. status measured difficulty not learned 37% [default] 0 2.3. Applying the Cost of Capital to Capital Budgeting and Security Valuation pany’s marginal cost of capital (MCC) may increase as additional capital is raised, whereas returns to a company’s investment opportunities are generally believed to decrease as the company makes additional investments, as represented by the <span>investment opportunity schedule (IOS).2 We show this relation in Figure 1, graphing the upward-sloping marginal cost of capital schedule against the downward-sloping investment opportunity schedule. In the context of a comp #### Flashcard 1473654689036 Tags #cfa-level-1 #fra-introduction #reading-22-financial-statement-analysis-intro Question The additional information provided may include: A report from [...] Answer management discussing the results. status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it The additional information provided may include: A letter from the chairman of the company, A report from management discussing the results (typically called management discussion and analysis or management commentary), An external auditor’s report providing assurances, A governance report describing the structure of the company’s board of directors, and a corporate responsibility #### Original toplevel document 3.1. Financial Statements and Supplementary Information with the required financial statements, a company typically provides additional information in its financial reports. In many jurisdictions, some or all of this additional information is mandated by regulators or accounting standards boards. <span>The additional information provided may include a letter from the chairman of the company, a report from management discussing the results (typically called management discussion and analysis [MD&A] or management commentary), an external auditor’s report providing assurances, a governance report describing the structure of the company’s board of directors, and a corporate responsibility report. As part of his or her analysis, the financial analyst should read and assess this additional information along with the financial statements. The following sections describe and illustr #### Flashcard 1473975815436 Tags #cfa-level-1 #reading-22-financial-statement-analysis-intro Question Volkswagen discloses in its first note that the [...], which might give rise to minor discrepancies when figures are added. Answer figures have been rounded status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it tatements are prepared in accordance with IFRS as adopted by the European Union, that the statements are prepared in compliance with German law, that the statements are denominated in millions of euros unless otherwise specified, and that the <span>figures have been rounded, which might give rise to minor discrepancies when figures are added.<span><body><html> #### Original toplevel document 3.1.5. Financial Notes and Supplementary Schedules erstanding the information provided in the primary statements. Volkswagen’s 2009 financial statements, for example, include 91 pages of notes. The notes disclose the basis of preparation for the financial statements. For example, <span>Volkswagen discloses in its first note that its fiscal year corresponds to the calendar year, that its financial statements are prepared in accordance with IFRS as adopted by the European Union, that the statements are prepared in compliance with German law, that the statements are denominated in millions of euros unless otherwise specified, and that the figures have been rounded, which might give rise to minor discrepancies when figures are added. Volkswagen also discloses that its financial statements are on a consolidated basis—that is, including Volkswagen AG and all of the subsidiary companies it controls. The no #### Flashcard 1474081459468 Tags #cfa-level-1 #reading-22-financial-statement-analysis-intro Question The exposure draft identifies five content elements of a “decision-useful management commentary.” Those content elements include 1) the [...] business; 2) management’s objectives and strategies; 3) the company’s significant resources, risks, and relationships; 4) results of operations; 5) critical performance measures. Answer nature of the status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it The exposure draft identifies five content elements of a “decision-useful management commentary.” Those content elements include 1) the nature of the business; 2) management’s objectives and strategies; 3) the company’s significant resources, risks, and relationships; 4) results of operations; and 5) #### Original toplevel document 3.1.6. Management Commentary or Management’s Discussion and Analysis ASB) issued an exposure draft in June 2009 that proposed a framework for the preparation and presentation of management commentary. Per the exposure draft, that framework will provide guidance rather than set forth requirements in a standard. <span>The exposure draft identifies five content elements of a “decision-useful management commentary.” Those content elements include 1) the nature of the business; 2) management’s objectives and strategies; 3) the company’s significant resources, risks, and relationships; 4) results of operations; and 5) critical performance measures. In the United States, the SEC requires listed companies to provide an MD&A and specifies the content.7 Management must highlight any favorable or unfavorable trends and #### Flashcard 1474414382348 Tags #cfa-level-1 #reading-23-financial-reporting-mechanics Question Examples of [...] include the purchase of equipment or sale of surplus equipment (such as an oven) by a restaurant (contrast this to the sale of an oven by an oven manufacturer, which would be an operating activity), and the purchase or sale of an office building, a retail store, or a factory. Answer status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it Investing activities are those activities associated with acquisition and disposal of long-term assets. Examples include the purchase of equipment or sale of surplus equipment (such as an oven) by a restaur #### Original toplevel document 2. THE CLASSIFICATION OF BUSINESS ACTIVITIES g of an entity. Examples include the sale of meals by a restaurant, the sale of services by a consulting firm, the manufacture and sale of ovens by an oven-manufacturing company, and taking deposits and making loans by a bank. <span>Investing activities are those activities associated with acquisition and disposal of long-term assets. Examples include the purchase of equipment or sale of surplus equipment (such as an oven) by a restaurant (contrast this to the sale of an oven by an oven manufacturer, which would be an operating activity), and the purchase or sale of an office building, a retail store, or a factory. Financing activities are those activities related to obtaining or repaying capital. The two primary sources for such funds are owners (shareholders) or creditors. Examp #### Flashcard 1474420149516 Tags #cfa-level-1 #reading-23-financial-reporting-mechanics Question Examples of [...] include issuing common shares, taking out a bank loan, and issuing bonds. Answer status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it Financing activities are those activities related to obtaining or repaying capital. The two primary sources for such funds are owners (shareholders) or creditors. Examples include issuing common shares, tak #### Original toplevel document 2. THE CLASSIFICATION OF BUSINESS ACTIVITIES us equipment (such as an oven) by a restaurant (contrast this to the sale of an oven by an oven manufacturer, which would be an operating activity), and the purchase or sale of an office building, a retail store, or a factory. <span>Financing activities are those activities related to obtaining or repaying capital. The two primary sources for such funds are owners (shareholders) or creditors. Examples include issuing common shares, taking out a bank loan, and issuing bonds. Understanding the nature of activities helps the analyst understand where the company is doing well and where it is not doing so well. Ideally, an analyst would pre #### Flashcard 1474425130252 Tags #cfa-level-1 #reading-23-financial-reporting-mechanics Question Ideally, an analyst would prefer that most of a company’s profits (and cash flow) come from [...] Answer its operating activities. status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it Ideally, an analyst would prefer that most of a company’s profits (and cash flow) come from its operating activities. #### Original toplevel document 2. THE CLASSIFICATION OF BUSINESS ACTIVITIES rs. Examples include issuing common shares, taking out a bank loan, and issuing bonds. Understanding the nature of activities helps the analyst understand where the company is doing well and where it is not doing so well. <span>Ideally, an analyst would prefer that most of a company’s profits (and cash flow) come from its operating activities. Exhibit 1 provides examples of typical business activities and how these activities relate to the elements of financial statements described in the following section. #### Flashcard 1474524220684 Tags #cfa-level-1 #reading-23-financial-reporting-mechanics Question Unlike the financial statement elements, there is no standard set of [...] applicable to all companies. Answer accounts status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it Unlike the financial statement elements, there is no standard set of accounts applicable to all companies. #### Original toplevel document 3.1. Financial Statement Elements and Accounts ded in every individual account are summarized and grouped appropriately within a financial statement element. Exhibit 2 provides a listing of common accounts. These accounts will be described throughout this reading or in following readings. <span>Unlike the financial statement elements, there is no standard set of accounts applicable to all companies. Although almost every company has certain accounts, such as cash, each company specifies the accounts in its accounting system based on its particular needs and circumstances. For examp #### Flashcard 1474532609292 Tags #cfa-level-1 #reading-23-financial-reporting-mechanics Question A company’s challenge is to establish accounts and account groupings that provide meaningful [...] but retain enough detail to facilitate decision making and preparation of the financial statements. Answer summarization of voluminous data status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it A company’s challenge is to establish accounts and account groupings that provide meaningful summarization of voluminous data but retain enough detail to facilitate decision making and preparation of the financial statements. The actual accounts used in a company’s accounting system will be set forth in a char #### Original toplevel document 3.1. Financial Statement Elements and Accounts ount for each of its ovens, with the accounts named “Oven-1” and “Oven-2.” In its financial statements, these accounts would likely be grouped within long-term assets as a single line item called “Property, plant, and equipment.” <span>A company’s challenge is to establish accounts and account groupings that provide meaningful summarization of voluminous data but retain enough detail to facilitate decision making and preparation of the financial statements. The actual accounts used in a company’s accounting system will be set forth in a chart of accounts . Generally, the chart of accounts is far more detailed than the information presented in financial statements. Certain accounts are used to offset other accounts. For example, a common asset account is accounts receivable, also known as “trade accounts receivable” or “trade receivab #### Flashcard 1475135278348 Tags #cfa-level-1 #reading-23-financial-reporting-mechanics Question A [...] shows all changes to owners’ equity, (retained earnings and share issuance or repurchase) Answer statement of retained earnings status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it A statement of retained earnings can be viewed as a component of the statement of stockholders’ equity, which shows all changes to owners’ equity, both changes resulting from retained earnings and changes resulting fro #### Original toplevel document 3.2. Accounting Equations ements noted previously serve as the inputs for equations that underlie the financial statements. This section describes the equations for three of the financial statements: balance sheet, income statement, and statement of retained earnings. <span>A statement of retained earnings can be viewed as a component of the statement of stockholders’ equity, which shows all changes to owners’ equity, both changes resulting from retained earnings and changes resulting from share issuance or repurchase. The fourth basic financial statement, the statement of cash flows, will be discussed in a later section. The balance sheet presents a company’s financial position at a pa #### Flashcard 1475142356236 Tags #cfa-level-1 #reading-23-financial-reporting-mechanics Question What is owners equity equation? Answer Owners’ equity = Contributed capital + Retained earnings status measured difficulty not learned 37% [default] 0 3.2. Accounting Equations entity, but the equation remains the same. Owners’ equity at a given date can be further classified by its origin: capital contributed by owners, and earnings retained in the business up to that date:4 Equation (2) <span>Owners’ equity = Contributed capital + Retained earnings The income statement presents the performance of a business for a specific period of time. The equation reflected in the income statement is the following: E #### Flashcard 1475176959244 Tags #cfa-level-1 #reading-23-financial-reporting-mechanics Question To provide a combined representation of the balance sheet and income statement, we can expand the accounting equation: Answer Assets = Liabilities + Contributed capital + Ending retained earnings status measured difficulty not learned 37% [default] 0 3.2. Accounting Equations on of the income statement. To provide a combined representation of the balance sheet and income statement, we can substitute Equation 2 into Equation 1a. This becomes the expanded accounting equation: Equation (5a) <span>Assets = Liabilities + Contributed capital + Ending retained earnings Or equivalently, substituting Equation 4b into Equation 5a, we can write: Equation (5b) Assets=Liabilities+Contributedcapital+Beginningretainedea #### Flashcard 1475180367116 Tags #cfa-level-1 #reading-23-financial-reporting-mechanics Question Really expanded accounting equation Answer Assets = Liabilities + Contributed capital + Beginning retained earnings + Revenue − Expenses− Dividends The last five items, beginning with contributed capital, are components of owners’ equity. status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it Assets=Liabilities+Contributedcapital+Beginningretainedearnings+Revenue−Expenses−DividendsAssets=Liabilities+Contributedcapital+Beginningretainedearnings+ Revenue−Expenses−Dividends #### Original toplevel document 3.2. Accounting Equations on: Equation (5a) Assets = Liabilities + Contributed capital + Ending retained earnings Or equivalently, substituting Equation 4b into Equation 5a, we can write: Equation (5b) <span>Assets=Liabilities+Contributedcapital+Beginningretainedearnings+Revenue−Expenses−DividendsAssets=Liabilities+Contributedcapital+Beginningretainedearnings+ Revenue−Expenses−Dividends The last five items, beginning with contributed capital, are components of owners’ equity. The statement of retained earnings shows the linkage between the b #### Flashcard 1476226845964 Tags #cfa-level-1 #reading-23-financial-reporting-mechanics Question [...] to an asset is recorded on the right side of a T-account. Answer A decrease status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it A decrease to an asset is recorded on the right side of a T-account. #### Original toplevel document APPENDIX 23: A DEBIT/CREDIT ACCOUNTING SYSTEM e sheet (and accounting equation) and hence are on the left side of the T-account. Assets are, therefore, recorded with a debit balance. In other words, to record an increase in an asset, an entry is made to the left-hand side of a T-account. <span>A decrease to an asset is recorded on the right side of a T-account. Liabilities and owners’ equity are referred to as the right side of the balance sheet (and accounting equation). Increases to liabilities and owners’ equity are recorded on the right si #### Flashcard 1477038705932 Tags #6-principles #69-ways-to-influence #social-proof Question This principle also comes across in the weight we [...] of other people around us. Answer give the advice – even people unqualified to give a good opinion. status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it This principle also comes across in the weight we give the advice of other people around us – even people unqualified to give a good opinion. #### Original toplevel document (pdf) cannot see any pdfs #### Flashcard 1477051026700 Tags #6-principles #69-ways-to-influence #liking Question Those who received an email from someone who [...] returned the forms more that those who didnt. Answer had a similar sounding name status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it Those who received an email from someone who had a similar sounding name returned the forms more that those who didnt. #### Original toplevel document (pdf) cannot see any pdfs #### Flashcard 1477052599564 Tags #6-principles #69-ways-to-influence #liking Question We also like people who we find to be [...]. Answer attractive status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it we also like people who we find to be attractive. There is a theory, which states that, people who are attractive are also going to possess other qualities such as being loyal and committed and thus, people are more likely to listen t #### Original toplevel document (pdf) cannot see any pdfs #### Flashcard 1477062823180 Tags #69-ways-to-influence Question People do not necessarily know where their [...]. Answer emotions are coming from You can lead their emotions, in many man ways. status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it People do not necessarily know where their emotions are coming from. You can lead their emotions, in many man ways. #### Original toplevel document (pdf) cannot see any pdfs #### Flashcard 1478019124492 Tags #cfa-level-1 #reading-23-financial-reporting-mechanics Question A positive aspect of [...] is that increases are an indicator of future revenues. Answer unearned revenue status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it A positive aspect of unearned revenue is that increases in unearned revenue are an indicator of future revenues. For example, a large liability on the balance sheet of an airline relates to cash received for future airline #### Original toplevel document Open it ved and the corresponding liability to deliver newsletters) and, subsequently, 12 future adjusting entries, the first one of which was illustrated as Transaction 12. Each adjusting entry reduces the liability and records revenue. <span>In practice, a large amount of unearned revenue may cause some concern about a company’s ability to deliver on this future commitment. Conversely, a positive aspect is that increases in unearned revenue are an indicator of future revenues. For example, a large liability on the balance sheet of an airline relates to cash received for future airline travel. Revenue will be recognized as the travel occurs, so an increase in this liability is an indicator of future increases in revenue. <span><body><html> #### Flashcard 1478021483788 Tags #cfa-level-1 #reading-23-financial-reporting-mechanics Question A large liability on the balance sheet of an airline relates to cash received for future airline travel. This is an example of what kind of account? Answer Unearned revenue status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it A positive aspect of unearned revenue is that increases in unearned revenue are an indicator of future revenues. For example, a large liability on the balance sheet of an airline relates to cash received for future airline travel. Revenue will be recognized as the travel occurs, so an increase in this liability is an indicator of future increases in revenue. #### Original toplevel document Open it ved and the corresponding liability to deliver newsletters) and, subsequently, 12 future adjusting entries, the first one of which was illustrated as Transaction 12. Each adjusting entry reduces the liability and records revenue. <span>In practice, a large amount of unearned revenue may cause some concern about a company’s ability to deliver on this future commitment. Conversely, a positive aspect is that increases in unearned revenue are an indicator of future revenues. For example, a large liability on the balance sheet of an airline relates to cash received for future airline travel. Revenue will be recognized as the travel occurs, so an increase in this liability is an indicator of future increases in revenue. <span><body><html> #### Flashcard 1478082039052 Tags #cfa-level-1 #reading-23-financial-reporting-mechanics Question What is the order that journal entries follow? Answer chronological order status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it A journal is a document or computer file in which business transactions are recorded in the order in which they occur (chronological order). The general journal is the collection of all business transactions in an accounting system sorted by date. All accounting systems have a general journal to record all transactions. So #### Original toplevel document Open it ved and the corresponding liability to deliver newsletters) and, subsequently, 12 future adjusting entries, the first one of which was illustrated as Transaction 12. Each adjusting entry reduces the liability and records revenue. <span>In practice, a large amount of unearned revenue may cause some concern about a company’s ability to deliver on this future commitment. Conversely, a positive aspect is that increases in unearned revenue are an indicator of future revenues. For example, a large liability on the balance sheet of an airline relates to cash received for future airline travel. Revenue will be recognized as the travel occurs, so an increase in this liability is an indicator of future increases in revenue. <span><body><html> #### Flashcard 1478084398348 Tags #cfa-level-1 #reading-23-financial-reporting-mechanics Question The [...] is the collection of all business transactions in an accounting system sorted by date. Answer general journal All accounting systems have a general journal to record all transactions. status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it A journal is a document or computer file in which business transactions are recorded in the order in which they occur (chronological order). The general journal is the collection of all business transactions in an accounting system sorted by date. All accounting systems have a general journal to record all transactions. Some accounting systems #### Original toplevel document Open it ved and the corresponding liability to deliver newsletters) and, subsequently, 12 future adjusting entries, the first one of which was illustrated as Transaction 12. Each adjusting entry reduces the liability and records revenue. <span>In practice, a large amount of unearned revenue may cause some concern about a company’s ability to deliver on this future commitment. Conversely, a positive aspect is that increases in unearned revenue are an indicator of future revenues. For example, a large liability on the balance sheet of an airline relates to cash received for future airline travel. Revenue will be recognized as the travel occurs, so an increase in this liability is an indicator of future increases in revenue. <span><body><html> #### Flashcard 1478178508044 Tags #cfa-level-1 #reading-23-financial-reporting-mechanics Question Why is understanding that there has to be another side to every entry key in detecting inappropriate accounting? Answer Because usually in the course of “fixing” one account there will be another account with a balance that does not make sense. status measured difficulty not learned 37% [default] 0 #### Flashcard 1478411554060 Tags #cfa-level-1 #reading-25-understanding-income-statement Question The term [...]means that the revenue number is reported after adjustments. Answer status measured difficulty not learned 37% [default] 0 2. COMPONENTS AND FORMAT OF THE INCOME STATEMENT On the top line of the income statement, companies typically report revenue. Revenue generally refers to amounts charged (and expected to be received) for the delivery of goods or services in the ordinary activities of a business. The term <span>net revenue means that the revenue number is reported after adjustments (e.g., for cash or volume discounts, or for estimated returns). Revenue may be called sales or turnover.4 Exhibits 1 and 2 sh #### Flashcard 1478447992076 Tags #cfa-level-1 #reading-25-understanding-income-statement Question Certain items, such as revenue, finance costs, and tax expense, are required by IFRS to be presented [...] on the face of the income statement. Answer separately status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it Certain items, such as revenue, finance costs, and tax expense, are required to be presented separately on the face of the income statement. #### Original toplevel document 2. COMPONENTS AND FORMAT OF THE INCOME STATEMENT 3; In addition to presenting the net income, income statements also present items, including subtotals, which are significant to users of financial statements. Some of the items are specified by IFRS but other items are not specified.7 <span>Certain items, such as revenue, finance costs, and tax expense, are required to be presented separately on the face of the income statement. IFRS additionally require that line items, headings, and subtotals relevant to understanding the entity’s financial performance should be presented even if not specified. Expenses may b #### Flashcard 1478500683020 Tags #cfa-level-1 #reading-25-understanding-income-statement Question The specific calculations of gross profit and operating profit may vary by company, and a reader of financial statements can consult [...] to identify significant variations across companies. Answer the notes to the statements status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it The specific calculations of gross profit and operating profit may vary by company, and a reader of financial statements can consult the notes to the statements to identify significant variations across companies. #### Original toplevel document 2. COMPONENTS AND FORMAT OF THE INCOME STATEMENT ss segments, operating profit can be useful in evaluating the performance of the individual business segments, because interest and tax expenses may be more relevant at the level of the overall company rather than an individual segment level. <span>The specific calculations of gross profit and operating profit may vary by company, and a reader of financial statements can consult the notes to the statements to identify significant variations across companies. Operating profit is sometimes referred to as EBIT (earnings before interest and taxes). However, operating profit and EBIT are not necessarily the same. Note that in both E #### Flashcard 1478504877324 Tags #cfa-level-1 #reading-25-understanding-income-statement Question Are operating profit and EBIT necessarily the same? Answer Fuck no status measured difficulty not learned 37% [default] 0 2. COMPONENTS AND FORMAT OF THE INCOME STATEMENT y, and a reader of financial statements can consult the notes to the statements to identify significant variations across companies. Operating profit is sometimes referred to as EBIT (earnings before interest and taxes). However, <span>operating profit and EBIT are not necessarily the same. Note that in both Exhibits 1 and 2, interest and taxes do not represent the only differences between earnings (net income, net earnings) and operating income. For example, both companie #### Flashcard 1478593219852 Question With a letter of credit what happens In the event that the buyer is unable to make payment on the purchase? [...] Answer the bank will be required to cover the full or remaining amount of the purchase. status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it With a letter of credit what happens In the event that the buyer is unable to make payment on the purchase? the bank will be required to cover the full or remaining amount of the purchase. #### Original toplevel document Letter Of Credit Definition | Investopedia What is a 'Letter Of Credit' <span>A letter of credit is a letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase. Due to the nature of international dealings, including factors such as distance, differing laws in each country, and difficulty in knowing each party personally, the use of letters of credit has become a very important aspect of international trade. BREAKING DOWN 'Letter Of Credit' Because a letter of credit is typically a negotiable instrument, the issuing bank pays the beneficiary or any bank #### Flashcard 1478614977804 Tags #buyers-credit #indian-eximbank Question Through this programme, the overseas buyer can open a "[...]" in favour of the Indian exporter and can import goods and services from India on deferred payment terms. Answer letter of credit status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it Through this programme, the overseas buyer can open a "letter of credit" in favour of the Indian exporter and can import goods and services from India on deferred payment terms. #### Original toplevel document Buyer's Credit - Financial Products - Exim Bank Inspiration to expand possibilities Buyer's Credit is our unique credit facility programme that motivates Indian exporters to explore new geographies. <span>Through this programme, the overseas buyer can open a "letter of credit" in favour of the Indian exporter and can import goods and services from India on deferred payment terms. While on the one hand, the exporter enjoys reduced transaction costs and complexities of international trade transactions, on the other hand, the Indian exporter gets to compete in the #### Flashcard 1478686280972 Question [...] is an accrual accounting technique used to allocate the cost of extracting natural resources such as timber, minerals and oil from the earth. Answer Depletion status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it What is 'Depletion' Depletion is an accrual accounting technique used to allocate the cost of extracting natural resources such as timber, minerals and oil from the earth. Unlike depreciation and amortization, which #### Original toplevel document Depletion Definition | Investopedia <span>What is 'Depletion' Depletion is an accrual accounting technique used to allocate the cost of extracting natural resources such as timber, minerals and oil from the earth. Unlike depreciation and amortization, which mainly describe the deduction of expenses due to the aging of equipment and property, depletion is the actual physical depletion of natural resources by companies. !--break--For accounting and financial reporting purposes, depletion is meant to assist in accurately identifying the value of the assets on the balance sheet and recording expenses in #### Flashcard 1479040175372 Tags #daniel-goleman #emotional-brain #emotional-iq #what-are-emotions-for Question It is with the heart that one sees rightly; what is essential is [...]. ANTOINE DE SAINT-EXUPÉRY Answer invisible to the eye status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it It is with the heart that one sees rightly; what is essential is invisible to the eye. ANTOINE DE SAINT-EXUPÉRY #### Original toplevel document (pdf) cannot see any pdfs #### Flashcard 1479171771660 Tags #daniel-goleman #emotional-brain #emotional-iq #how-the-brain-grew #what-are-emotions-for #when-passions-overwhelm-reasons Question The neocortex is the seat of thought; it contains the centers that put together and comprehend what the [...]. Answer senses perceive status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it The neocortex is the seat of thought; it contains the centers that put together and comprehend what the senses perceive. #### Original toplevel document (pdf) cannot see any pdfs #### Flashcard 1479811665164 Tags #cfa-level-1 #reading-25-understanding-income-statement #revenue-recognition Question Under the [...] method, revenue is recognized based on the stage of completion of a transaction or contract and is, thus, recognized when the services are rendered. Answer percentage-of-completion status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it Under the percentage-of-completion method, revenue is recognized based on the stage of completion of a transaction or contract and is, thus, recognized when the services are rendered. #### Original toplevel document 3.2.1. Long-Term Contracts a licensing arrangement, the company may recognize the revenue on a prorated basis over the period of time of the contract rather than at the end of the contract term. Under IFRS, this may be done using the percentage-of-completion method.16 <span>Under the percentage-of-completion method, revenue is recognized based on the stage of completion of a transaction or contract and is, thus, recognized when the services are rendered. Construction contracts are examples of contracts that may span a number of accounting periods and that may use the percentage-of-completion method.17 IFRS provide that when the outcome #### Flashcard 1479823723788 Tags #cfa-level-1 #reading-25-understanding-income-statement #revenue-recognition Question Under the [...] method, the company does not report any income until the contract is substantially finished, although provision should be made for expected losses. Answer status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it Under the completed contract method, the company does not report any income until the contract is substantially finished (the remaining costs and potential risks are insignificant in amount), although provision sho #### Original toplevel document 3.2.1. Long-Term Contracts d incurred. Under this method, no profit is recognized until all the costs had been recovered. Under US GAAP, but not under IFRS, a revenue recognition method used when the outcome cannot be measured reliably is the completed contract method. <span>Under the completed contract method, the company does not report any income until the contract is substantially finished (the remaining costs and potential risks are insignificant in amount), although provision should be made for expected losses. Billings and costs are accumulated on the balance sheet rather than flowing through the income statement. Under US GAAP, the completed contract method is also acceptable when the entity #### Flashcard 1479934348556 Tags #cfa-level-1 #reading-25-understanding-income-statement #revenue-recognition Question An advantage of the [...] method is that it results in better matching of revenue recognition with the accounting period in which it was earned. Answer percentage-of-completion status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it an advantage of the percentage-of-completion method is that it results in better matching of revenue recognition with the accounting period in which it was earned. #### Original toplevel document 3.2.1. Long-Term Contracts han the completed contract method and thus may be considered a less conservative approach. In addition, the percentage-of-completion method relies on management estimates and is thus not as objective as the completed contract method. However, <span>an advantage of the percentage-of-completion method is that it results in better matching of revenue recognition with the accounting period in which it was earned. Because of better matching with the periods in which work is performed, the percentage-of-completion method is the preferred method of revenue recognition for long-term contracts and is #### Flashcard 1480000933132 Tags #cfa-level-1 #reading-25-understanding-income-statement #revenue-recognition Question Under the [...] method, the seller does not report any profit until the cash amounts paid by the buyer are greater than all the seller’s costs of the property. Answer cost recovery method status measured difficulty not learned 37% [default] 0 3.2.2. Installment Sales thod and the cost recovery method . Under the installment method, the portion of the total profit of the sale that is recognized in each period is determined by the percentage of the total sales price for which the seller has received cash. <span>Under the cost recovery method, the seller does not report any profit until the cash amounts paid by the buyer—including principal and interest on any financing from the seller—are greater than all the seller’s costs of the property. Note that the cost recovery method is similar to the revenue recognition method under international standards, described above, when the outcome of a contract cannot be measured reliabl #### Flashcard 1480042614028 Tags #cfa-level-1 #reading-25-understanding-income-statement Question With real estate sales where there is doubt about the buyer’s ability to complete payments, the installment method and [...] method of revenue recognition are used. Answer cost recovery status measured difficulty not learned 37% [default] 0 #### Flashcard 1480257047820 Tags #reading-25-understanding-income-statement #revenue-recognition Question Revenue recognition issues related to barter transactions became particularly important as [...]. Answer e-commerce developed status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it Revenue recognition issues related to barter transactions became particularly important as e-commerce developed. #### Original toplevel document 3.2.3. Barter Revenue recognition issues related to barter transactions became particularly important as e-commerce developed. As an example, if Company A exchanges advertising space for computer equipment from Company B but no cash changes hands, can Company A and B both report revenue? Such an exchange is ref #### Flashcard 1481587166476 Tags #cfa-level-1 #expense-recognition #reading-25-understanding-income-statement Question [...] are expenditures that less directly match revenues Answer Period costs They are reflected in the period when a company makes the expenditure. status measured difficulty not learned 37% [default] 0 4.1. General Principles rrent period will remain unsold at the end of the current period and so will be sold in a following period. Matching requires that a company recognizes cost of goods sold in the same period as revenues from the sale of the goods. <span>Period costs , expenditures that less directly match revenues, are reflected in the period when a company makes the expenditure or incurs the liability to pay. Administrative expenses are an example of period costs. Other expenditures that also less directly match revenues relate more directly to future expected benefits; in this case, the exp #### Flashcard 1481701723404 Tags #cfa-level-1 #expense-recognition #reading-25-understanding-income-statement Question Common acceleration factors are [...] percent and [...] percent. Answer 150 200 status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it Common acceleration factors are 150 percent and 200 percent. The latter is known as double declining balance depreciation because it depreciates the asset at double the straight-line rate. #### Original toplevel document 4.2. Issues in Expense Recognition the amount of future expenses resulting from its warranties, to recognize an estimated warranty expense in the period of the sale, and to update the expense as indicated by experience over the life of the warranty. <span>4.2.3. Depreciation and Amortisation Companies commonly incur costs to obtain long-lived assets. Long-lived assets are assets expected to provide economic benefits over a future period of time greater than one year. Examples are land (property), plant, equipment, and intangible assets (assets lacking physical substance) such as trademarks. The costs of most long-lived assets are allocated over the period of time during which they provide economic benefits. The two main types of long-lived assets whose costs are not allocated over time are land and those intangible assets with indefinite useful lives. Depreciation is the process of systematically allocating costs of long-lived assets over the period during which the assets are expected to provide economic benefits. “Depreciation” is the term commonly applied to this process for physical long-lived assets such as plant and equipment (land is not depreciated), and amortisation is the term commonly applied to this process for intangible long-lived assets with a finite useful life.32 Examples of intangible long-lived assets with a finite useful life include an acquired mailing list, an acquired patent with a set expiration date, and an acquired copyright with a set legal life. The term “amortisation” is also commonly applied to the systematic allocation of a premium or discount relative to the face value of a fixed-income security over the life of the security. IFRS allow two alternative models for valuing property, plant, and equipment: the cost model and the revaluation model.33 Under the cost model, the depreciable amount of that asset (cost less residual value) is allocated on a systematic basis over the remaining useful life of the asset. Under the cost model, the asset is reported at its cost less any accumulated depreciation. Under the revaluation model, the asset is reported at its fair value. The revaluation model is not permitted under US GAAP. Here, we will focus only on the cost model. There are two other differences between IFRS and US GAAP to note: IFRS require each component of an asset to be depreciated separately and US GAAP do not require component depreciation; and IFRS require an annual review of residual value and useful life, and US GAAP do not explicitly require such a review. The method used to compute depreciation should reflect the pattern over which the economic benefits of the asset are expected to be consumed. IFRS do not prescribe a particular method for computing depreciation but note that several methods are commonly used, such as the straight-line method, diminishing balance method (accelerated depreciation), and the units of production method (depreciation varies depending upon production or usage). The straight-line method allocates evenly the cost of long-lived assets less estimated residual value over the estimated useful life of an asset. (The term “straight line” derives from the fact that the annual depreciation expense, if represented as a line graph over time, would be a straight line. In addition, a plot of the cost of the asset minus the cumulative amount of annual depreciation expense, if represented as a line graph over time, would be a straight line with a negative downward slope.) Calculating depreciation and amortisation requires two significant estimates: the estimated useful life of an asset and the estimated residual value (also known as “salvage value”) of an asset. Under IFRS, the residual value is the amount that the company expects to receive upon sale of the asset at the end of its useful life. Example 9 assumes that an item of equipment is depreciated using the straight-line method and illustrates how the annual depreciation expense varies under different estimates of the useful life and estimated residual value of an asset. As shown, annual depreciation expense is sensitive to both the estimated useful life and to the estimated residual value. <span><body><html> #### Flashcard 1481857699084 Tags #cfa-level-1 #expense-recognition #reading-25-understanding-income-statement Question A policy that results in recognition of expenses later rather than sooner is considered [...] conservative. Answer less status measured difficulty not learned 37% [default] 0 4.3. Implications for Financial Analysis me. These are only a few of the choices and estimates that affect a company’s reported net income. As with revenue recognition policies, a company’s choice of expense recognition can be characterized by its relative conservatism. <span>A policy that results in recognition of expenses later rather than sooner is considered less conservative. In addition, many items of expense require the company to make estimates that can significantly affect net income. Analysis of a company’s financial statements, and particularly compari #### Flashcard 1598475603212 Tags #cfa-level-1 #financial-reporting-and-analysis #non-recurring-non-operating-items #understanding-income-statement Question analysts should exclude items that are [...] when predicting a company's future earnings and cash flows Answer non-recurring in nature status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it analysts should exclude items that are non-recurring in nature when predicting a company's future earnings and cash flows #### Original toplevel document Subject 6. Non-Recurring Items and Non-Operating Items sustainable income and therefore should be the primary focus of analysis. Segregating the results of recurring operations from those of non-recurring items facilitates the forecasting of future earnings and cash flows. Generally, <span>analysts should exclude items that are non-recurring in nature when predicting a company's future earnings and cash flows. However, this does not mean that every non-recurring item in the income statement should be ignored. Management tends to label many items in the income statement as "non-recurring #### Flashcard 1598478748940 Tags #cfa-level-1 #financial-reporting-and-analysis #non-recurring-non-operating-items #understanding-income-statement Question Management tends to label many items in the income statement as "non-recurring," especially [...] Answer those that reduce reported income. status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it Management tends to label many items in the income statement as "non-recurring," especially those that reduce reported income. #### Original toplevel document Subject 6. Non-Recurring Items and Non-Operating Items flows. Generally, analysts should exclude items that are non-recurring in nature when predicting a company's future earnings and cash flows. However, this does not mean that every non-recurring item in the income statement should be ignored. <span>Management tends to label many items in the income statement as "non-recurring," especially those that reduce reported income. For the purpose of analysis, an important issue is to assess whether non-recurring items are really "non-recurring," regardless of their accounting labels. There #### Flashcard 1598497885452 Tags #cfa-level-1 #financial-reporting-and-analysis #non-recurring-non-operating-items #understanding-income-statement Question Where should extraordinary items be reported Answer separately below the line net of income tax. status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it Extraordinary items are BOTH unusual in nature AND infrequent in occurrence, and material in amount. They must be reported separately (below the line) net of income tax. #### Original toplevel document Subject 6. Non-Recurring Items and Non-Operating Items . Subsidiaries and investees also qualify as separate components. Disposal of a portion of a business component does not qualify as discontinued operations. Instead, this is recorded as an unusual or infrequent item. <span>2. Extraordinary items Extraordinary items are BOTH unusual in nature AND infrequent in occurrence, and material in amount. They must be reported separately (below the line) net of income tax. Common examples are: Expropriations by foreign governments. Uninsured losses from earthquakes, eruptions, and tornadoes. Note that gains and losses from the early retirement of debt used to be treated as extraordinary items; SFAS No. 145 now requires them to be treated as part of continuing operations. 3. Unusual or infrequent items These are either unusual in nature OR infrequent in occurrence but not both. They may be disclosed separately (as a single-line #### Flashcard 1601912573196 Tags #6-principles #69-ways-to-influence #commitment-and-consistency Question Simply by reminding someone that [...], will start to cement their minds onto that track of thought and action. Answer they have acted a certain way status measured difficulty not learned 37% [default] 0 #### Parent (intermediate) annotation Open it Simply by reminding someone that they have acted a certain way in the past, will start to cement their minds onto that track of thought and action. #### Original toplevel document (pdf) cannot see any pdfs #### Flashcard 1602966916364 Tags #analyst-notes #cfa-level-1 #financial-reporting-and-analysis #reading-26-understanding-balance-sheets Question What is typically the starting place for analyzing a company? Answer the balance sheet status measured difficulty not learned 37% [default] 0 Subject 1. Components and Format of the Balance Sheet The starting place for analyzing a company is typically the balance sheet. Think of the balance sheet as a photo of the business at a specific point in time. It presents the assets, liabilities, and equity ownership of a company as of a specific date. A #### Flashcard 1603051851020 Tags #cfa-level-1 #financial-reporting-and-analysis #reading-26-understanding-balance-sheets Question The five major items found in the current assets section are: • Cash. • [...] • Accounts receivables. • [...] . • [...] Answer Marketable securities. Inventories Pre-paid expenses. status measured difficulty not learned 37% [default] 0 Subject 2. Measurement Bases of Assets and Liabilities in light of accounting policies applied in order to answer the question of how the values relate to economic reality and to each other. Current Assets Current assets are presented in the balance sheet in order of liquidity. <span>The five major items found in the current assets section are: Cash. Valued at its stated value. Cash restricted for purpose other than payment of current obligations or for use in current operations should be excluded from the current asset section. Marketable securities. Valued at cost or lower of cost and market value. Accounts receivables. Amounts owed to the company by its customers for goods and services delivered. Valued at the estimated amount collectible. Inventories. Products that will be sold in the normal course of business. They should be measured at the lower of cost or net realizable value. Refer to Reading 28 [Inventories] for details. Pre-paid expenses. These are expenditures already made for benefits (usually services) to be received within one year or the operating cycle, whichever is longer. Typical examples are pre-paid rent, advertising, taxes, insurance policies, and office or operating supplies. They are reported at the amount of un-expired or unconsumed cost. Current Liabilities Current liabilities are typically paid from current assets or by incurring new short-term liabilities. They are not reported in any consist #### Flashcard 1603201797388 Tags #cfa-level-1 #reading-26-understanding-balance-sheets Question [...] are debt securities that management intends to hold to their maturity dates. Answer Held-to-maturity securities status measured difficulty not learned 37% [default] 0 Subject 3. Financial Instruments: Financial Assets and Financial Liabilities (bonds). Loans and receivables. Financial liabilities: All other liabilities (such as bonds payable or notes payable). Accounting for Gains and Losses on Marketable Securities <span>Held-to-maturity securities. Debt securities that management intends to hold to their maturity dates. At year-end, they are reported at cost adjusted for the effect of interest (debit the securities account and credit the interest income account) and unrealized holding gains and losses are not recognized. Trading securities. Debt and equity securities bought and held mainly for sale in the short term to generate income on price changes. At year-end, they are report #### Flashcard 1603213331724 Tags #cfa-level-1 #reading-26-understanding-balance-sheets Question When Trading securities are sold, the realized gains or losses will also appear on [...] Answer the income statement. status measured difficulty not learned 37% [default] 0 Subject 3. Financial Instruments: Financial Assets and Financial Liabilities d mainly for sale in the short term to generate income on price changes. At year-end, they are reported at their fair market value. Any unrealized holding gains or losses are recognized on the company's income statement as part of net income. <span>When they are sold, the realized gains or losses will also appear on the income statement. Realized gains and losses are not affected by any unrealized gains or losses recognized before. Available-for-sale securities. Debt and equity securities not classified #### Flashcard 1603215691020 Tags #cfa-level-1 #reading-26-understanding-balance-sheets Question [...] debt and equity securities not classified as held-to-maturity or trading securities. Answer Available-for-sale securities status measured difficulty not learned 37% [default] 0 Subject 3. Financial Instruments: Financial Assets and Financial Liabilities ncome statement as part of net income. When they are sold, the realized gains or losses will also appear on the income statement. Realized gains and losses are not affected by any unrealized gains or losses recognized before. <span>Available-for-sale securities. Debt and equity securities not classified as held-to-maturity or trading securities. Unrealized gains and losses are reported as part of other comprehensive income (in contrast, the unrealized gains or losses of trading securities are reported in the income statement as #### Flashcard 1611252501772 Question [...] It decreases stockholder's equity and total shares outstanding. Answer Treasury stock status measured difficulty not learned 37% [default] 0 Equity ompany since its inception less all dividends paid out. Treasury stock. This is a company's own stock that has Already been fully issued and was outstanding; Been reacquired by the company; and Not been retired. <span>It decreases stockholder's equity and total shares outstanding. Accumulated comprehensive income. This includes items such as the minimum liability recognized for under-funded pension plans, market value changes in non-current #### Flashcard 1611259579660 Question It reveals much more about the year's stockholders' equity transactions than the statement of retained earnings. Answer Statement of Changes in Shareholders' Equity status measured difficulty not learned 37% [default] 0 Equity hanges. Refer to Reading 24 [Understanding the Income Statement] for details. Statement of Changes in Shareholders' Equity This statement reflects information about increases or decreases to a company's net assets or wealth. <span>It reveals much more about the year's stockholders' equity transactions than the statement of retained earnings. The statement of shareholders' equity is a financial statement that summarizes changes that occurred during the accounting period in components of the stockholders' equity #### Flashcard 1611300736268 Question [...] eliminates less liquid assets, such as inventory and pre-paid expenses, from the current ratio. Answer Quick Ratio (Acid-Test Ratio) status measured difficulty not learned 37% [default] 0 Subject 5. Uses and Analysis of the Balance Sheet of dollars of current assets available to meet current obligations. It is the best-known liquidity measure. A current ratio of less than 1 indicates the company has negative working capital. <span>Quick Ratio (Acid-Test Ratio) eliminates less liquid assets, such as inventory and pre-paid expenses, from the current ratio. If inventory is not moving, the quick ratio is a better indicator of cash and near-cash items that will be available to meet current obligations. & #### Flashcard 1611315678476 Tags #balance-sheet-analysis Question [...] is an indicator of the degree of protection available to the creditors in the event of insolvency of a company. Answer Long-Term Debt-Equity Ratio status measured difficulty not learned 37% [default] 0 Subject 5. Uses and Analysis of the Balance Sheet ory in the quick ratio, there is no guarantee that the receivables will be collected. Solvency ratios measure a company's ability to meet long-term and other obligations. <span>Long-Term Debt-Equity Ratio is an indicator of the degree of protection available to the creditors in the event of insolvency of a company. Higher debt-equity ratio indicates higher financial risk. Debt-Equity Ratio includes short-term debt in the numerator. #### Flashcard 1613730549004 Tags #cfa-level-1 #corporate-finance #understanding-cashflow-statements Question Cash receipts and cash payments during a period are classified in the statement of cash flows into three different activities: Answer Operating Investing Financing status measured difficulty not learned 37% [default] 0 Subject 1. Classification of Cash Flows and Non-Cash Activities cash and cash flow are also vital to a company's long-term success. Information on the sources and uses of cash helps creditors, investors, and other statement users evaluate the company's liquidity, solvency, and financial flexibility. <span>Cash receipts and cash payments during a period are classified in the statement of cash flows into three different activities: Operating Activities These involve the cash effects of transactions that enter into the determination of net income and changes in the working capital accounts #### Flashcard 1613735267596 Tags #cfa-level-1 #corporate-finance #understanding-cashflow-statements Question [...] (CFOs) Answer Cash flows from operating activities status measured difficulty not learned 37% [default] 0 Subject 1. Classification of Cash Flows and Non-Cash Activities Operating Activities These involve the cash effects of transactions that enter into the determination of net income and changes in the working capital accounts (accounts receivable, inventory, and accounts payable). <span>Cash flows from operating activities (CFOs) reflect the company's ability to generate sufficient cash from its continuing operations. CFOs are derived by converting the income statement from an accrual basis to a cash basis. For #### Flashcard 1613756763404 Tags #cfa-level-1 #corporate-finance #understanding-cashflow-statements Question interest expense is reported on the [...] Answer income statement status measured difficulty not learned 37% [default] 0 Subject 1. Classification of Cash Flows and Non-Cash Activities est 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 activities. Note that <span>interest expense is reported on the income statement while dividends flow through the retained earnings statement. Remember that an interest/dividend item is an operating activity if it appears on the income statement. For example, #### Flashcard 1613883641100 Tags #cfa-level-1 #corporate-finance #understanding-cashflow-statements Question Obtaining capital from owners and giving them a return on their investments is a kind of [...] activity Answer Financing activity status measured difficulty not learned 37% [default] 0 Subject 1. Classification of Cash Flows and Non-Cash Activities affiliates and long-term investments in securities. Loans to other entities or collection of loans from other entities. Financing Activities These involve liability and owner's equity items, and include: <span>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. In general, the items in this section relate to the debt and the equity items on the balance sheet. Financ #### Flashcard 1613932137740 Tags #cfa-level-1 #corporate-finance #understanding-cashflow-statements Question if a company purchases$200,000 of land by issuing a long-term bond, this transaction is [...]
Non-cash Activities

status measured difficulty not learned 37% [default] 0

Subject 1. Classification of Cash Flows and Non-Cash Activities

#### Flashcard 1622807809292

Tags
#tvm
Question

Only Dollar amounts indexed at the same point in time are additive.

status measured difficulty not learned 37% [default] 0

#### Flashcard 1622879112460

Tags
#tvm
Question
Rule of 72 : Divide 72 by [...] to get the approximate number of years it would take to double an investment
the stated interest rate

(double it at the interest rate.)

status measured difficulty not learned 37% [default] 0

Rule of 72
To quickly approximate the number of periods, practitioners sometimes use an ad hoc rule called the Rule of 72 : Divide 72 by the stated interest rate to get the approximate number of years it would take to double an investment at the interest rate. Here, the approximation gives 72/7 = 10.3 years. The Rule of 72 is loosely based on the observation that it takes 12 years to double an amount at a 6 percent interest rate, giving 6 × 1

#### Flashcard 1623554919692

Tags
#discounted-cashflow-applications
Question

The IRR and NPV rules rank projects differently when

• the [...] ​​​​​​​ cash flows differs.

timing of the projects’

status measured difficulty not learned 37% [default] 0

#### Flashcard 1624284990732

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#discounted-cashflow-applications
Question

#### Flashcard 1626670763276

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Question
How do you change the time unit in HPR?
Changing the interpretation of the time interval.

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Subject 2. Holding Period Return
d). Note that for common stocks the distribution is the dividend; for bonds, the distribution is the coupon payment. The holding period return for any asset can be calculated for any time period (day, week, month, or year) simply <span>by changing the interpretation of the time interval. Return can be expressed in decimals (0.05), fractions (5/100), or as a percent (5%). These are all equivalent. <span><body><html>

#### Flashcard 1631942741260

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Question
Time-weighted means that returns are [...]
averaged over time.

status measured difficulty not learned 37% [default] 0

Subject 3. Dollar-weighted and Time-weighted Rates of Return

#### Flashcard 1632708201740

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Question
There are two types of money market instruments: [...], and [...]
interest-bearing instruments (e.g., bank certificates of deposit)

pure discount instruments (e.g., U.S. Treasury bills).

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Subject 4. Different Yield Measures of a U.S. Treasury Bill
Money market instruments are low-risk, highly liquid debt instruments with a maturity of one year or less. There are two types of money market instruments: interest-bearing instruments (e.g., bank certificates of deposit), and pure discount instruments (e.g., U.S. Treasury bills). Pure discount instruments such as T-bills are quoted differently than U.S. government bonds. They are quoted on a bank discount basis rather than on a price basis: &#

#### Flashcard 1633167740172

Tags
Question
Is the HPR of a T-bill annualized?
No

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Subject 4. Different Yield Measures of a U.S. Treasury Bill
ument at its maturity (that is, interest). Since a pure discount instrument (e.g., a T-bill) makes no interest payment, its HPY is (P 1 - P 0 )/P 0 . Note that HPY is computed on the basis of purchase price, not face value. <span>It is not an annualized yield. The effective annual yield is the annualized HPY on the basis of a 365-day year. It incorporates the effect of compounding interest.

#### Flashcard 1648999927052

Tags
Question
• By convention, 0! = [...]
1

status measured difficulty not learned 37% [default] 0

#### Flashcard 1652462587148

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Question
nPr = [...]

status measured difficulty not learned 37% [default] 0
Subject 10. Principles of Counting
(The combination formula, or the binomial formula): For example, if you select two of the ten stocks you are analyzing, how many ways can you select the stocks? 10! / [(10 - 2)! x 2!] = 45. <span>An ordered listing is known as a permutation, and the formula that counts the number of permutations is known as the permutation formula. The number of ways that we can choose r objects from a total of n objects, where the order in which the r objects is listed does matter, is: For example, if you select two of the ten stocks you are analyzing and invest $10,000 in one stock and$20,000 in another stock, how many ways ca

#### Flashcard 1664658050316

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Is Bank discount yield annualized?
Yes, but on a 360 day year.

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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 =

#### Flashcard 1706272623884

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What is the role of financial reporting?
Provide information about a company's financial position and performance

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The role of financial reporting is to provide information about a company's financial position and performance for use by parties both internal and external to the company.

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Subject 1. The Roles of Financial Reporting and Financial Statement Analysis
The role of financial reporting is to provide information about a company's financial position and performance for use by parties both internal and external to the company. Financial statements are issued by management, who is responsible for their form and content. The role of financial statement analysis, on the other hand, is to take these

#### Flashcard 1708342512908

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ESG
Environmental, social and governance.

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#### Flashcard 1729359645964

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#Borges
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Lo que yo encuentro sobre todo malo en los deportes es la idea de que alguien [...] y de que alguien [...] , y de que este hecho suscite [...] .

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Borges, Jorge Luis sur Twitter : &quot;Lo que yo encuentro sobre todo malo en los deportes es la idea de que alguien gane y de que alguien pierda, y de que este hecho suscite riva… https://t.co/3bP06RPSjB&quot;
Unblock @BorgesJorgeL Report Tweet Add to other Moment Add to new Moment <span>Lo que yo encuentro sobre todo malo en los deportes es la idea de que alguien gane y de que alguien pierda, y de que este hecho suscite rivalidades. Translate from Spanish Translated from Spanish by Bing What I find especially bad at sports is the idea that someone wins an

#### Flashcard 1729598983436

Question
A trend stationary process is not strictly stationary, but can easily be transformed into a stationary process by [...], which is solely a function of time.
removing the underlying trend

This operation sounds too frequentist.. The uncertainty related to the trend is imposed on the trend removed process. Refer to Jaynes later.

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A trend stationary process is not strictly stationary, but can easily be transformed into a stationary process by removing the underlying trend, which is solely a function of time.

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Stationary process - Wikipedia
rting. In the latter case of a deterministic trend, the process is called a trend stationary process, and stochastic shocks have only transitory effects after which the variable tends toward a deterministically evolving (non-constant) mean. <span>A trend stationary process is not strictly stationary, but can easily be transformed into a stationary process by removing the underlying trend, which is solely a function of time. Similarly, processes with one or more unit roots can be made stationary through differencing. An important type of non-stationary process that does not include a trend-like behavior is

#### Annotation 1729805290764

 Since the objective function is unknown, the Bayesian strategy (of optimisation) is to treat it as a random function and place a prior over it. The prior captures our beliefs about the behaviour of the function. After gathering the function evaluations, which are treated as data, the prior is updated to form the posterior distribution over the objective function. The posterior distribution, in turn, is used to construct an acquisition function (often also referred to as infill sampling criteria) that determines what the next query point should be.

Bayesian optimization - Wikipedia
erences 8 External links History[edit source] The term is generally attributed to Jonas Mockus and is coined in his work from a series of publications on global optimization in the 1970s and 1980s. [2] [3] [4] Strategy[edit source] <span>Since the objective function is unknown, the Bayesian strategy is to treat it as a random function and place a prior over it. The prior captures our beliefs about the behaviour of the function. After gathering the function evaluations, which are treated as data, the prior is updated to form the posterior distribution over the objective function. The posterior distribution, in turn, is used to construct an acquisition function (often also referred to as infill sampling criteria) that determines what the next query point should be. Examples[edit source] Examples of acquisition functions include probability of improvement, expected improvement, Bayesian expected losses, upper confidence bounds (UCB), Thompson s

#### Annotation 1729827048716

 #linear-algebra #matrix-decomposition The Cholesky decomposition of a Hermitian positive-definite matrix A is a decomposition of the form where L is a lower triangular matrix with real and positive diagonal entries, and L* denotes the conjugate transpose of L. Every Hermitian positive-definite matrix (and thus also every real-valued symmetric positive-definite matrix) has a unique Cholesky decomposition.[2] If the matrix A is Hermitian and positive semi-definite, then it still has a decomposition of the form A = LL* if the diagonal entries of L are allowed to be zero.[3] When A has real entries, L has real entries as well, and the factorization may be written A = LLT.[4] The Cholesky decomposition is unique when A is positive definite; there is only one lower triangular matrix L with strictly positive diagonal entries such that A = LL*. However, the decomposition need not be unique when A is positive semidefinite. The converse holds trivially: if A can be written as LL* for some invertible L, lower triangular or otherwise, then A is Hermitian and positive definite.

Cholesky decomposition - Wikipedia
s 7 Generalization 8 Implementations in programming languages 9 See also 10 Notes 11 References 12 External links 12.1 History of science 12.2 Information 12.3 Computer code 12.4 Use of the matrix in simulation 12.5 Online calculators <span>Statement[edit source] The Cholesky decomposition of a Hermitian positive-definite matrix A is a decomposition of the form A = L L ∗ , {\displaystyle \mathbf {A} =\mathbf {LL} ^{*},} where L is a lower triangular matrix with real and positive diagonal entries, and L* denotes the conjugate transpose of L. Every Hermitian positive-definite matrix (and thus also every real-valued symmetric positive-definite matrix) has a unique Cholesky decomposition. [2] If the matrix A is Hermitian and positive semi-definite, then it still has a decomposition of the form A = LL* if the diagonal entries of L are allowed to be zero. [3] When A has real entries, L has real entries as well, and the factorization may be written A = LL T . [4] The Cholesky decomposition is unique when A is positive definite; there is only one lower triangular matrix L with strictly positive diagonal entries such that A = LL*. However, the decomposition need not be unique when A is positive semidefinite. The converse holds trivially: if A can be written as LL* for some invertible L, lower triangular or otherwise, then A is Hermitian and positive definite. LDL decomposition[edit source] A closely related variant of the classical Cholesky decomposition is the LDL decomposition, A =

#### Annotation 1730080541964

 Expecatation propagation aims to minimise $$KL(p(x,\theta\mid y,m)\parallel q(x,\theta\mid m))$$. The problem with this minimisation, is that $$p(x,\theta\mid y,m)$$ is unknown, so the first thing we do is to force some structure on this distribution, by making assumptions. For many models with IID observation, the posterior can be factorised as $$p(\theta \mid D) = \frac{1}{p(D)} p(\theta) \prod_{i=1}^{N} p(x^{(i)} \mid \theta)$$ which is a product of prior and likelihood, normalised by the data likelihood. Ignoring the constant, we can rearrange the posterior as $$p(\theta \mid D) \propto \prod_{i=0}^{N} f_i(\theta)$$ with $$f_0(\theta) = p(\theta)$$ and $$f_i(\theta) = p(x^{(i)} \mid \theta) .$$ And now our goal is to find a factorable $$q(\theta) = \prod_{i=0}^{N} \tilde{f_i}(\theta)$$ that is close to our posterior. EP manages this with a Gibbs sampling like procedure by $$\min_{\tilde{f_i}(\theta)} KL \left( f_i(\theta) \prod_{j \neq i}^{N} \tilde{f_j}(\theta) \parallel \tilde{f_i}(\theta) \prod_{j \neq i}^{N} \tilde{f_j}(\theta) \right)$$ and updating one factor at a time. The complete proceduce is as follows: ​​​​Initialise $f_0(\theta) \cdots f_N(\theta)$; Initialise $\tilde{f_0}(\theta) = f_0(\theta)$ and $\tilde{f_i}(\theta) = 1$ for $i > 0$Compute $q(\theta) = \prod_{i=0}^{N} \tilde{f_i}(\theta)$for $i = 0 \cdots N$ do Deletion: delete current variable from joint distribution: $q_{\i}(\theta) \leftarrow \frac{q(\theta)}{\tilde{f_i}(\theta)} = \prod_{j \neq i}^{N} \tilde{f_j}(\theta)$Projection: update current variable by minimising the KL divergence $\min_{\tilde{f_i}(\theta)} KL \left( f_i(\theta) q_{\\i}(\theta) \parallel \tilde{f_i}(\theta) q_{\\i}(\theta) \right)$Inclusion: update $q(\theta)$ using the current variable distribution \$q(\theta ) \leftarrow \tilde{f_i^{new}} (\theta) q_{\\i}(\theta)

#### Annotation 1730089192716

 VB generally requiring more iterations, however sometimes each iteration is much cheaper than an EP iteration.

bayesian - variational bayes vs expectation propagation - Cross Validated
8 down vote accepted It depends a lot on the details of the problem being solved. You can find a tabular comparison between them here, which links to more information. You are right about <span>VB generally requiring more iterations, however sometimes each iteration is much cheaper than an EP iteration. Your third bullet is worded like a disadvantage of EP but it's more like an advantage---you can use the same approximating family as VB if you want, but you don't have to.

#### Annotation 1730154728716

 in LBM, one solves the boltzmann equation depending on the various parameters and use a relaxation time to reach equilibrium. NSE are a special case derived from boltzmann equation mostly using Chapman enskog expansion. So basically you are solving a flow problem starting from transient state itself rather than solving on equilibrium state only. While in FVM, FEM, FDM, SPECTRAL methods or other traditional methods which focus to solve NSE. What actually is being solved is approximate algebraic equation derived from PDE(NSE). Essentially algebraic equations are being solved. Conclusively, what actually you are solving is far different than what actual NSE represents leave aside Boltzmann's​ equation. I hope you can understand what advantages or efficient, accurate solution will be.﻿

3 天前 • Karthik Ganeshan <span>in LBM, one solves the boltzmann equation depending on the various parameters and use a relaxation time to reach equilibrium. NSE are a special case derived from boltzmann equation mostly using Chapman enskog expansion. So basically you are solving a flow problem starting from transient state itself rather than solving on equilibrium state only. While in FVM, FEM, FDM, SPECTRAL methods or other traditional methods which focus to solve NSE. What actually is being solved is approximate algebraic equation derived from PDE(NSE). Essentially algebraic equations are being solved. Conclusively, what actually you are solving is far different than what actual NSE represents leave aside Boltzmann's​ equation. I hope you can understand what advantages or efficient, accurate solution will be.﻿ 收起 展开 回复 0

#### Annotation 1730158136588

 In mathematics, a Fourier series ( English: / ˈ f ʊər i ˌ eɪ / )[1] is a way to represent a function as the sum of simple sine waves. More formally, it decomposes any periodic function or periodic signal into the sum of a (possibly infinite) set of simple oscillating functions, namely sines and cosines (or, equivalently, complex exponentials).

Fourier series - Wikipedia
are wave [imagelink] Fourier transforms Continuous Fourier transform Fourier series Discrete-time Fourier transform Discrete Fourier transform Discrete Fourier transform over a ring Fourier analysis Related transforms <span>In mathematics, a Fourier series ( English: /ˈfʊəriˌeɪ/) [1] is a way to represent a function as the sum of simple sine waves. More formally, it decomposes any periodic function or periodic signal into the sum of a (possibly infinite) set of simple oscillating functions, namely sines and cosines (or, equivalently, complex exponentials). The discrete-time Fourier transform is a periodic function, often defined in terms of a Fourier series. The Z-transform, another example of application, reduces to a Fourier series for

#### Flashcard 1730164690188

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#variational-inference
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[...] can be seen as an extension of the expectation-maximization algorithm
Variational inference

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Variational Bayes can be seen as an extension of the EM (expectation-maximization) algorithm from maximum a posteriori estimation (MAP estimation) of the single most probable value of each parameter to f

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Variational Bayesian methods - Wikipedia
om. In particular, whereas Monte Carlo techniques provide a numerical approximation to the exact posterior using a set of samples, Variational Bayes provides a locally-optimal, exact analytical solution to an approximation of the posterior. <span>Variational Bayes can be seen as an extension of the EM (expectation-maximization) algorithm from maximum a posteriori estimation (MAP estimation) of the single most probable value of each parameter to fully Bayesian estimation which computes (an approximation to) the entire posterior distribution of the parameters and latent variables. As in EM, it finds a set of optimal parameter values, and it has the same alternating structure as does EM, based on a set of interlocked (mutually dependent) equations that cannot be s

#### Flashcard 1730167049484

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VB generally requiring [...], however sometimes each iteration is much cheaper than an EP iteration.
more iterations

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VB generally requiring more iterations, however sometimes each iteration is much cheaper than an EP iteration.

#### Original toplevel document

bayesian - variational bayes vs expectation propagation - Cross Validated
8 down vote accepted It depends a lot on the details of the problem being solved. You can find a tabular comparison between them here, which links to more information. You are right about <span>VB generally requiring more iterations, however sometimes each iteration is much cheaper than an EP iteration. Your third bullet is worded like a disadvantage of EP but it's more like an advantage---you can use the same approximating family as VB if you want, but you don't have to.

#### Flashcard 1730169408780

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EP uses an iterative approach that leverages [...] of the target distribution.
the factorization structure

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EP finds approximations to a probability distribution. It uses an iterative approach that leverages the factorization structure of the target distribution.

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Expectation propagation - Wikipedia
Expectation propagation From Wikipedia, the free encyclopedia Jump to: navigation, search Expectation propagation (EP) is a technique in Bayesian machine learning. <span>EP finds approximations to a probability distribution. It uses an iterative approach that leverages the factorization structure of the target distribution. It differs from other Bayesian approximation approaches such as Variational Bayesian methods. References[edit source] Thomas Minka (August 2–5, 2001). "Expectation Propagation

#### Flashcard 1730170981644

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#matrix-decomposition
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Computers usually solve square systems of linear equations using [...]
the LU decomposition

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Computers usually solve square systems of linear equations using the LU decomposition, and it is also a key step when inverting a matrix, or computing the determinant of a matrix.

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LU decomposition - Wikipedia
rization) factors a matrix as the product of a lower triangular matrix and an upper triangular matrix. The product sometimes includes a permutation matrix as well. The LU decomposition can be viewed as the matrix form of Gaussian elimination. <span>Computers usually solve square systems of linear equations using the LU decomposition, and it is also a key step when inverting a matrix, or computing the determinant of a matrix. The LU decomposition was introduced by mathematician Tadeusz Banachiewicz in 1938. [1] Contents [hide] 1 Definitions 1.1 LU factorization with Partial Pivoting 1.2 LU facto

#### Flashcard 1730172554508

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#matrix-decomposition
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LU decomposition factors a matrix as the product of [...] and [...] .
a lower and an upper triangular matrixmatrix.

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In numerical analysis and linear algebra, LU decomposition (where 'LU' stands for 'lower upper', and also called LU factorization) factors a matrix as the product of a lower triangular matrix and an upper triangular matrix.

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LU decomposition - Wikipedia
on - Wikipedia ocultar siempre | ocultar ahora LU decomposition From Wikipedia, the free encyclopedia Jump to: navigation, search <span>In numerical analysis and linear algebra, LU decomposition (where 'LU' stands for 'lower upper', and also called LU factorization) factors a matrix as the product of a lower triangular matrix and an upper triangular matrix. The product sometimes includes a permutation matrix as well. The LU decomposition can be viewed as the matrix form of Gaussian elimination. Computers usually solve square systems of lin

#### Annotation 1730486078732

 #linear-algebra #matrix-decomposition The Cholesky decomposition of a Hermitian positive-definite matrix A is a decomposition of the form where L is a lower triangular matrix with real and positive diagonal entries, and L* denotes the conjugate transpose of L.

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The Cholesky decomposition of a Hermitian positive-definite matrix A is a decomposition of the form where L is a lower triangular matrix with real and positive diagonal entries, and L* denotes the conjugate transpose of L. Every Hermitian positive-definite matrix (and thus also every real-valued symmetric positive-definite matrix) has a unique Cholesky decomposition. [2] If the matrix A is Her

#### Original toplevel document

Cholesky decomposition - Wikipedia
s 7 Generalization 8 Implementations in programming languages 9 See also 10 Notes 11 References 12 External links 12.1 History of science 12.2 Information 12.3 Computer code 12.4 Use of the matrix in simulation 12.5 Online calculators <span>Statement[edit source] The Cholesky decomposition of a Hermitian positive-definite matrix A is a decomposition of the form A = L L ∗ , {\displaystyle \mathbf {A} =\mathbf {LL} ^{*},} where L is a lower triangular matrix with real and positive diagonal entries, and L* denotes the conjugate transpose of L. Every Hermitian positive-definite matrix (and thus also every real-valued symmetric positive-definite matrix) has a unique Cholesky decomposition. [2] If the matrix A is Hermitian and positive semi-definite, then it still has a decomposition of the form A = LL* if the diagonal entries of L are allowed to be zero. [3] When A has real entries, L has real entries as well, and the factorization may be written A = LL T . [4] The Cholesky decomposition is unique when A is positive definite; there is only one lower triangular matrix L with strictly positive diagonal entries such that A = LL*. However, the decomposition need not be unique when A is positive semidefinite. The converse holds trivially: if A can be written as LL* for some invertible L, lower triangular or otherwise, then A is Hermitian and positive definite. LDL decomposition[edit source] A closely related variant of the classical Cholesky decomposition is the LDL decomposition, A =

#### Flashcard 1730517011724

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#linear-algebra #matrix-decomposition
Question

The Cholesky decomposition is of the form [...]

where L is a lower triangular matrix with real and positive diagonal entries, and L* denotes the conjugate transpose of L.

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The Cholesky decomposition of a Hermitian positive-definite matrix A is a decomposition of the form where L is a lower triangular matrix with real and positive diagonal entries, and L* denotes the conjugate transpose of L.

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Cholesky decomposition - Wikipedia
s 7 Generalization 8 Implementations in programming languages 9 See also 10 Notes 11 References 12 External links 12.1 History of science 12.2 Information 12.3 Computer code 12.4 Use of the matrix in simulation 12.5 Online calculators <span>Statement[edit source] The Cholesky decomposition of a Hermitian positive-definite matrix A is a decomposition of the form A = L L ∗ , {\displaystyle \mathbf {A} =\mathbf {LL} ^{*},} where L is a lower triangular matrix with real and positive diagonal entries, and L* denotes the conjugate transpose of L. Every Hermitian positive-definite matrix (and thus also every real-valued symmetric positive-definite matrix) has a unique Cholesky decomposition. [2] If the matrix A is Hermitian and positive semi-definite, then it still has a decomposition of the form A = LL* if the diagonal entries of L are allowed to be zero. [3] When A has real entries, L has real entries as well, and the factorization may be written A = LL T . [4] The Cholesky decomposition is unique when A is positive definite; there is only one lower triangular matrix L with strictly positive diagonal entries such that A = LL*. However, the decomposition need not be unique when A is positive semidefinite. The converse holds trivially: if A can be written as LL* for some invertible L, lower triangular or otherwise, then A is Hermitian and positive definite. LDL decomposition[edit source] A closely related variant of the classical Cholesky decomposition is the LDL decomposition, A =

#### Flashcard 1730593557772

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#linear-algebra #matrix-decomposition
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In Cholesky decomposition of the form L is a [...]

lower triangular matrix with real and positive diagonal entries

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The Cholesky decomposition of a Hermitian positive-definite matrix A is a decomposition of the form where L is a lower triangular matrix with real and positive diagonal entries, and L* denotes the conjugate transpose of L.

#### Original toplevel document

Cholesky decomposition - Wikipedia
s 7 Generalization 8 Implementations in programming languages 9 See also 10 Notes 11 References 12 External links 12.1 History of science 12.2 Information 12.3 Computer code 12.4 Use of the matrix in simulation 12.5 Online calculators <span>Statement[edit source] The Cholesky decomposition of a Hermitian positive-definite matrix A is a decomposition of the form A = L L ∗ , {\displaystyle \mathbf {A} =\mathbf {LL} ^{*},} where L is a lower triangular matrix with real and positive diagonal entries, and L* denotes the conjugate transpose of L. Every Hermitian positive-definite matrix (and thus also every real-valued symmetric positive-definite matrix) has a unique Cholesky decomposition. [2] If the matrix A is Hermitian and positive semi-definite, then it still has a decomposition of the form A = LL* if the diagonal entries of L are allowed to be zero. [3] When A has real entries, L has real entries as well, and the factorization may be written A = LL T . [4] The Cholesky decomposition is unique when A is positive definite; there is only one lower triangular matrix L with strictly positive diagonal entries such that A = LL*. However, the decomposition need not be unique when A is positive semidefinite. The converse holds trivially: if A can be written as LL* for some invertible L, lower triangular or otherwise, then A is Hermitian and positive definite. LDL decomposition[edit source] A closely related variant of the classical Cholesky decomposition is the LDL decomposition, A =

#### Annotation 1730788068620

 Since the objective function is unknown, the Bayesian strategy (of optimisation) is to treat it as a random function and place a prior over it.

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Since the objective function is unknown, the Bayesian strategy (of optimisation) is to treat it as a random function and place a prior over it. The prior captures our beliefs about the behaviour of the function. After gathering the function evaluations, which are treated as data, the prior is updated to form the posterior distr

#### Original toplevel document

Bayesian optimization - Wikipedia
erences 8 External links History[edit source] The term is generally attributed to Jonas Mockus and is coined in his work from a series of publications on global optimization in the 1970s and 1980s. [2] [3] [4] Strategy[edit source] <span>Since the objective function is unknown, the Bayesian strategy is to treat it as a random function and place a prior over it. The prior captures our beliefs about the behaviour of the function. After gathering the function evaluations, which are treated as data, the prior is updated to form the posterior distribution over the objective function. The posterior distribution, in turn, is used to construct an acquisition function (often also referred to as infill sampling criteria) that determines what the next query point should be. Examples[edit source] Examples of acquisition functions include probability of improvement, expected improvement, Bayesian expected losses, upper confidence bounds (UCB), Thompson s

#### Flashcard 1730817953036

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#bayesian-optimisation
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Bayesian optimisation treats the objective function as random and put a [...] over it.

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Since the objective function is unknown, the Bayesian strategy (of optimisation) is to treat it as a random function and place a prior over it.

#### Original toplevel document

Bayesian optimization - Wikipedia
erences 8 External links History[edit source] The term is generally attributed to Jonas Mockus and is coined in his work from a series of publications on global optimization in the 1970s and 1980s. [2] [3] [4] Strategy[edit source] <span>Since the objective function is unknown, the Bayesian strategy is to treat it as a random function and place a prior over it. The prior captures our beliefs about the behaviour of the function. After gathering the function evaluations, which are treated as data, the prior is updated to form the posterior distribution over the objective function. The posterior distribution, in turn, is used to construct an acquisition function (often also referred to as infill sampling criteria) that determines what the next query point should be. Examples[edit source] Examples of acquisition functions include probability of improvement, expected improvement, Bayesian expected losses, upper confidence bounds (UCB), Thompson s

#### Annotation 1730860420364

 The posterior distribution (of the objective function), in turn, is used to construct an acquisition function (often also referred to as infill sampling criteria) that determines what the next query point should be.

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Open it
ace a prior over it. The prior captures our beliefs about the behaviour of the function. After gathering the function evaluations, which are treated as data, the prior is updated to form the posterior distribution over the objective function. <span>The posterior distribution, in turn, is used to construct an acquisition function (often also referred to as infill sampling criteria) that determines what the next query point should be. <span><body><html>

#### Original toplevel document

Bayesian optimization - Wikipedia
erences 8 External links History[edit source] The term is generally attributed to Jonas Mockus and is coined in his work from a series of publications on global optimization in the 1970s and 1980s. [2] [3] [4] Strategy[edit source] <span>Since the objective function is unknown, the Bayesian strategy is to treat it as a random function and place a prior over it. The prior captures our beliefs about the behaviour of the function. After gathering the function evaluations, which are treated as data, the prior is updated to form the posterior distribution over the objective function. The posterior distribution, in turn, is used to construct an acquisition function (often also referred to as infill sampling criteria) that determines what the next query point should be. Examples[edit source] Examples of acquisition functions include probability of improvement, expected improvement, Bayesian expected losses, upper confidence bounds (UCB), Thompson s

#### Flashcard 1730911014156

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#has-images
[unknown IMAGE 1739364109580]
Question
The posterior distribution (of the objective function) is used to construct the [...]
acquisition function

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The posterior distribution (of the objective function), in turn, is used to construct an acquisition function (often also referred to as infill sampling criteria) that determines what the next query point should be.

#### Original toplevel document

Bayesian optimization - Wikipedia
erences 8 External links History[edit source] The term is generally attributed to Jonas Mockus and is coined in his work from a series of publications on global optimization in the 1970s and 1980s. [2] [3] [4] Strategy[edit source] <span>Since the objective function is unknown, the Bayesian strategy is to treat it as a random function and place a prior over it. The prior captures our beliefs about the behaviour of the function. After gathering the function evaluations, which are treated as data, the prior is updated to form the posterior distribution over the objective function. The posterior distribution, in turn, is used to construct an acquisition function (often also referred to as infill sampling criteria) that determines what the next query point should be. Examples[edit source] Examples of acquisition functions include probability of improvement, expected improvement, Bayesian expected losses, upper confidence bounds (UCB), Thompson s

#### Flashcard 1730982317324

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#matrix-decomposition
Question

Hermitian matrices can be understood as the complex extension of

[...]

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Hermitian matrices can be understood as the complex extension of real symmetric matrices.

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Hermitian matrix - Wikipedia
A = A T ¯ {\displaystyle A={\overline {A^{\text{T}}}}} , in matrix form. <span>Hermitian matrices can be understood as the complex extension of real symmetric matrices. If the conjugate transpose of a matrix A {\displaystyle A} is denoted by A H

#### Flashcard 1730991230220

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Hermitian matrices can be understood as the [...] of real symmetric matrices.

complex extension

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Hermitian matrices can be understood as the complex extension of real symmetric matrices.

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Hermitian matrix - Wikipedia
A = A T ¯ {\displaystyle A={\overline {A^{\text{T}}}}} , in matrix form. <span>Hermitian matrices can be understood as the complex extension of real symmetric matrices. If the conjugate transpose of a matrix A {\displaystyle A} is denoted by A H

#### Flashcard 1731009580300

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#linear-algebra #matrix-decomposition
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Cholesky decomposition factorises a Hermitian, positive-definite matrix into the product of [...] and its conjugate transpose,

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In linear algebra, the Cholesky decomposition or Cholesky factorization is a decomposition of a Hermitian, positive-definite matrix into the product of a lower triangular matrix and its conjugate transpose, which is useful e.g. for efficient numerical solutions and Monte Carlo simulations.

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Cholesky decomposition - Wikipedia
ikipedia ocultar siempre | ocultar ahora Cholesky decomposition From Wikipedia, the free encyclopedia Jump to: navigation, search <span>In linear algebra, the Cholesky decomposition or Cholesky factorization is a decomposition of a Hermitian, positive-definite matrix into the product of a lower triangular matrix and its conjugate transpose, which is useful e.g. for efficient numerical solutions and Monte Carlo simulations. It was discovered by André-Louis Cholesky for real matrices. When it is applicable, the Cholesky decomposition is roughly twice as efficient as the LU decomposition for solving systems

#### Flashcard 1731011939596

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#quantecon
Question

OOP is about producing [...] — an important determinant of productivity

well organized code

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OOP is about producing well organized code — an important determinant of productivity

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Object Oriented Programming – Quantitative Economics
ramming, and nicely supported in Python OOP has become an important concept in modern software engineering because It can help facilitate clean, efficient code (if used well) The OOP design pattern fits well with many computing problems <span>OOP is about producing well organized code — an important determinant of productivity Moreover, OOP is a part of Python, and to progress further it’s necessary to understand the basics About OOP¶ OOP is supported in many languages: JAVA and Ruby are relativel

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Question
1. Coronary flow reserve (the increase in coronary blood flow in response to agents that lead to microvascular dilation) begins to decrease when a coronary artery stenosis is 50% or more luminal diameter. However, basal coronary flow does not begin to decrease until the lesion is 80% to 90% luminal diameter
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 In the study of Fourier series, complicated but periodic functions are written as the sum of simple waves mathematically represented by sines and cosines.

Fourier transform - Wikipedia
he frequency domain representation of the function, f̂, is the collection of these peaks at the frequencies that appear in this resolution of the function. One motivation for the Fourier transform comes from the study of Fourier series. <span>In the study of Fourier series, complicated but periodic functions are written as the sum of simple waves mathematically represented by sines and cosines. The Fourier transform is an extension of the Fourier series that results when the period of the represented function is lengthened and allowed to approach infinity. [10] Due to the pr

#### Annotation 1731020590348

 The Fourier transform is an extension of the Fourier series that results when the period of the represented function is lengthened and allowed to approach infinity.

Fourier transform - Wikipedia
One motivation for the Fourier transform comes from the study of Fourier series. In the study of Fourier series, complicated but periodic functions are written as the sum of simple waves mathematically represented by sines and cosines. <span>The Fourier transform is an extension of the Fourier series that results when the period of the represented function is lengthened and allowed to approach infinity. [10] Due to the properties of sine and cosine, it is possible to recover the amplitude of each wave in a Fourier series using an integral. In many cases it is desirable to use Euler's

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 Re-writing sines and cosines as complex exponentials makes it necessary for the Fourier coefficients to be complex valued. The usual interpretation of this complex number is that it gives both the amplitude (or size) of the wave present in the function and the phase (or the initial angle) of the wave.

Fourier transform - Wikipedia
write Fourier series in terms of the basic waves e 2πiθ . This has the advantage of simplifying many of the formulas involved, and provides a formulation for Fourier series that more closely resembles the definition followed in this article. <span>Re-writing sines and cosines as complex exponentials makes it necessary for the Fourier coefficients to be complex valued. The usual interpretation of this complex number is that it gives both the amplitude (or size) of the wave present in the function and the phase (or the initial angle) of the wave. These complex exponentials sometimes contain negative "frequencies". If θ is measured in seconds, then the waves e 2πiθ and e −2πiθ both complete one cycle per second, but t

#### Annotation 1731026881804

 #calculus Euler's formula, named after Leonhard Euler, is a mathematical formula in complex analysis that establishes the fundamental relationship between the trigonometric functions and the complex exponential function. Euler's formula states that for any real number x e i x = cos ⁡ x + i sin ⁡ x , {\displaystyle e^{ix}=\cos x+i\sin x,} where e is the base of the natural logarithm, i is the imaginary unit, and cos and sin are the trigonometric functions cosine and sine respectively, with the argument x given in radians.

Euler's formula - Wikipedia
s formula half-lives exponential growth and decay Defining e proof that e is irrational representations of e Lindemann–Weierstrass theorem People John Napier Leonhard Euler Related topics Schanuel's conjecture v t e <span>Euler's formula, named after Leonhard Euler, is a mathematical formula in complex analysis that establishes the fundamental relationship between the trigonometric functions and the complex exponential function. Euler's formula states that for any real number x e i x = cos ⁡ x + i sin ⁡ x , {\displaystyle e^{ix}=\cos x+i\sin x,} where e is the base of the natural logarithm, i is the imaginary unit, and cos and sin are the trigonometric functions cosine and sine respectively, with the argument x given in radians. This complex exponential function is sometimes denoted cis x ("cosine plus i sine"). The formula is still valid if x is a complex number, and so some authors refer to the more

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 #variational-inference Variational Bayesian methods are a family of techniques for approximating intractable integrals arising in Bayesian inference and machine learning.

Variational Bayesian methods - Wikipedia
f references, but its sources remain unclear because it has insufficient inline citations. Please help to improve this article by introducing more precise citations. (September 2010) (Learn how and when to remove this template message) <span>Variational Bayesian methods are a family of techniques for approximating intractable integrals arising in Bayesian inference and machine learning. They are typically used in complex statistical models consisting of observed variables (usually termed "data") as well as unknown parameters and latent variables, with various

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 #variational-inference Variational Bayesian methods are primarily used for two purposes: To provide an analytical approximation to the posterior probability of the unobserved variables, in order to do statistical inference over these variables.To derive a lower bound for the marginal likelihood (sometimes called the "evidence") of the observed data (i.e. the marginal probability of the data given the model, with marginalization performed over unobserved variables). This is typically used for performing model selection, the general idea being that a higher marginal likelihood for a given model indicates a better fit of the data by that model and hence a greater probability that the model in question was the one that generated the data. (See also the Bayes factor article.)

Variational Bayesian methods - Wikipedia
s sorts of relationships among the three types of random variables, as might be described by a graphical model. As is typical in Bayesian inference, the parameters and latent variables are grouped together as "unobserved variables". <span>Variational Bayesian methods are primarily used for two purposes: To provide an analytical approximation to the posterior probability of the unobserved variables, in order to do statistical inference over these variables. To derive a lower bound for the marginal likelihood (sometimes called the "evidence") of the observed data (i.e. the marginal probability of the data given the model, with marginalization performed over unobserved variables). This is typically used for performing model selection, the general idea being that a higher marginal likelihood for a given model indicates a better fit of the data by that model and hence a greater probability that the model in question was the one that generated the data. (See also the Bayes factor article.) In the former purpose (that of approximating a posterior probability), variational Bayes is an alternative to Monte Carlo sampling methods — particularly, Markov chain Monte Carlo met

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Variational Learning of Inducing Variables in Sparse Gaussian Processes

Michalis Titsias ; Proceedings of the Twelth International Conference on Artificial Intelligence and Statistics, PMLR 5:567-574, 2009.

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Sparse Gaussian process methods that use inducing variables require the selection of the inducing inputs and the kernel hyperparameters. We introduce a variational formulation for sparse approximations that jointly infers the inducing inputs and the kernel hyperparameters by maximizing a lower bound of the true log marginal likelihood. The key property of this formulation is that the inducing inputs are defined to be variational parameters which are selected by minimizing the Kullback-Leibler divergence between the variational distribution and the exact posterior distribution over the latent function values. We apply this technique to regression and we compare it with other approaches in the literature.

Variational Learning of Inducing Variables in Sparse Gaussian Processes
ceedings of Machine Learning Research Volume 5 All Volumes JMLR MLOSS FAQ Submission Format [imagelink] <span>Variational Learning of Inducing Variables in Sparse Gaussian Processes  Michalis Titsias ; Proceedings of the Twelth International Conference on Artificial Intelligence and Statistics, PMLR 5:567-574, 2009. Abstract Sparse Gaussian process methods that use inducing variables require the selection of the inducing inputs and the kernel hyperparameters. We introduce a variational formulation for sparse approximations that jointly infers the inducing inputs and the kernel hyperparameters by maximizing a lower bound of the true log marginal likelihood. The key property of this formulation is that the inducing inputs are defined to be variational parameters which are selected by minimizing the Kullback-Leibler divergence between the variational distribution and the exact posterior distribution over the latent function values. We apply this technique to regression and we compare it with other approaches in the literature. Related Material Download PDF @InProceedings{pmlr-v5-titsias09a, title = {Variational Learning of Inducing Variables in Sparse Gaussian Proc

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 Deep Gaussian processes (DGPs) are multi-layer hierarchical generalisations of Gaussian pro- cesses (GPs) and are formally equivalent to neural networks with multiple, infinitely wide hidden layers.

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 The new method uses an approximate Expectation Propagation procedure and a novel and efficient ex- tension of the probabilistic backpropagation algorithm for learning.

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 #deep-gaussian-process DGPs can perform input warping or dimensionality compression or expansion, and automatically learn to construct a kernel that works well for the data at hand. As a result, learning in this model provides a flexible form of Bayesian kernel design.

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 pseudo datapoint based approximation methods for DGPs trade model complexity for a lower computational complexity of $$O(NLM^ 2 )$$ where N is the number of datapoints, L is the number of layers, and M is the number of pseudo datapoints. This complexity scales quadratically in M whereas the dependence on the number of layers L is only linear. Therefore, it can be cheaper to increase the representation power of the model by adding extra layers rather than by adding more pseudo datapoints

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 #variational-inference For many applications, variational Bayes produces solutions of comparable accuracy to Gibbs sampling at greater speed.