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Flashcard 1431559343372

Tags
#cfa #cfa-level-1 #economics #microeconomics #reading-14-demand-and-supply-analysis-consumer-demand #section-3-utility-theory #study-session-4
Question
The single task of the utility function is to translate each basket of goods and services into a number that [...] according to [...]
Answer
rank orders the baskets according to a particular consumer’s preferences

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The single task of the utility function is to translate each basket of goods and services into a number that rank orders the baskets according to our particular consumer’s preferences. 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 mo

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3. UTILITY THEORY: MODELING PREFERENCES AND TASTES
, it is possible to come up with a rule that translates the quantities of goods in each basket into the number that our consumer has assigned to each basket. That “assignment rule” is called the utility function of that particular consumer. <span>The single task of that utility function is to translate each basket of goods and services into a number that rank orders the baskets according to our particular consumer’s preferences. 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. 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 th






Flashcard 1432985668876

Tags
#cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4
Question
A major purpose of financial institutions and markets is to enable the transfer of savings into [...]
Answer
capital investments.

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A major purpose of financial institutions and markets is to enable the transfer of savings into capital investments.

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2. TYPES OF MARKETS
receiving dividends and capital gains). Households make these savings choices when their anticipated future returns are judged to be more valuable today than the present consumption that households must sacrifice when they save. <span>Indeed, a major purpose of financial institutions and markets is to enable the transfer of these savings into capital investments. Firms use capital markets (markets for long-term financial capital—that is, markets for long-term claims on firms’ assets and cash flows) to sell debt (in bond markets) or equity (in






Flashcard 1435570146572

Tags
#cfa #cfa-level-1 #economics #lol #microeconomics #reading-15-demand-and-supply-analysis-the-firm #section-2-objectives-of-the-firm #study-session-4
Question
TC can be defined as [...] or [...] , depending on the objectives and requirements of the analyst for evaluating profit.
Answer
accounting costs

economic costs

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TC can be defined as accounting costs or economic costs, depending on the objectives and requirements of the analyst for evaluating profit.

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2. OBJECTIVES OF THE FIRM
ms as the difference between total revenue and total costs, profit maximization involves the following expression: Equation (1)  Π = TR – TC where Π is profit, TR is total revenue, and TC is total costs. <span>TC can be defined as accounting costs or economic costs, depending on the objectives and requirements of the analyst for evaluating profit. The characteristics of the product market, where the firm sells its output or services, and of the resource market, where the firm purchases resources, play an important role in the det






Flashcard 1451217784076

Tags
#conversation-tactics #how-to-take-a-complement
Question
People engage in conversation with each other for either [...] , information, [...] , and sometimes all of them at once.
Answer
entertainment

pleasure

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Compliments are meant to make people feel better about themselves, which ultimately builds comfort and rapport.

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Conversation tactics are like the background music in a television scene. When they’re there, you don’t notice that everything is flowing smoothly. But when they’re gone, you notice (sometimes immediately)






Flashcard 1474586348812

Tags
#cfa-level-1 #reading-23-financial-reporting-mechanics
Question
The presentation of assets as current or non-current will vary from [...].
Answer
industry to industry and from country to country

Some industries present current assets first, whereas others list non-current assets first.

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The presentation of assets as current or non-current will vary from industry to industry and from country to country. Some industries present current assets first, whereas others list non-current assets first.

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3.1. Financial Statement Elements and Accounts
ldings); other property held for investment, and investments in the securities of other companies. Current assets are those that are expected to be consumed or converted into cash in the near future, typically one year or less. <span>Inventory is the unsold units of product on hand (sometimes referred to as inventory stock). Trade receivables (also referred to as commercial receivables , or simply accounts receivable ) are amounts customers owe the company for products that have been sold as well as amounts that may be due from suppliers (such as for returns of merchandise). Other receivables represent amounts owed to the company from parties other than customers. Cash refers to cash on hand (e.g., petty cash and cash not yet deposited to the bank) and in the bank. Cash equivalents are very liquid short-term investments, usually maturing in 90 days or less. The presentation of assets as current or non-current will vary from industry to industry and from country to country. Some industries present current assets first, whereas others list non-current assets first. This is discussed further in later readings. <span><body><html>






Flashcard 1478189255948

Tags
#cfa-level-1 #reading-23-financial-reporting-mechanics #summary
Question

The statement of retained earnings is a component of the [...] .

Answer
statement of owners’ equity

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the basic and expanded accounting equations. The accounting system tracks and summarizes data used to create financial statements: the balance sheet, income statement, statement of cash flows, and statement of owners’ equity. The <span>statement of retained earnings is a component of the statement of owners’ equity. Accruals are a necessary part of the accounting process and are designed to allocate activity to the proper period for fi

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Summary
e basic accounting equation: Assets = Liabilities + Owners’ equity. The expanded accounting equation is Assets = Liabilities + Contributed capital + Beginning retained earnings + Revenue – Expenses – Dividends. <span>Business transactions are recorded in an accounting system that is based on the basic and expanded accounting equations. The accounting system tracks and summarizes data used to create financial statements: the balance sheet, income statement, statement of cash flows, and statement of owners’ equity. The statement of retained earnings is a component of the statement of owners’ equity. Accruals are a necessary part of the accounting process and are designed to allocate activity to the proper period for financial reporting purposes. The results of the accounting process are financial reports that are used by managers, investors, creditors, analysts, and others in making business decisions. An analyst uses the financial statements to make judgments on the financial health of a company. Company management can manipulate financial statements, and a perceptive analyst can use his or her understanding of financial statements to detect misrepresentations. <span><body><html>