Exam (elaborations)
SOA IFM EXAM
- Course
- Institution
Exam of 40 pages for the course SOA IFM at SOA IFM (SOA IFM EXAM)
[Show more]
Content preview
SOA IFM EXAMSOA IFM
Evatee 10/10/24 SOA IFM
,SOA IFM EXAM
Derivative Security (Chp. 1) Answer - A financial instrument whose value
depends on another security.
Option (Chp. 1) Answer - An agreement allowing the buyer of the option to
buy or sell an asset at a specific price on a specific day.
Clearinghouses (Chp. 1) Answer - Matches the buyers and the sellers and
keeps track of their obligations and payments.
Measures of Market Size and Activity (Chp. 1) Answer - 1) Trading Volumne
2) Market Value
3) Notional Value
4) Open Interest
Purpose of Derivatives (Chp. 1) Answer - 1) Risk Management
2) Speculation
3) Reduced Transaction Costs
4) Regulatory Arbitrage
Hedging (Chp. 1) Answer - Guaranteeing a buying or selling price.
Derivative Perspectives (Chp. 1) Answer - 1) End User
2) Market-Maker
3) Economic Observer
,Bid Price (Chp. 1) Answer - The amount that a person will pay for an asset.
Offer Price/Ask Price (Chp. 1) Answer - The price an asset can be bought for.
Bid-Ask Spread (Chp. 1) Answer - The difference between the bid and ask
prices.
Stock Orders (Chp. 1) Answer - 1) Market Order
2) Limit Order
3) Stop Loss Sales Order
Market Order (Chp. 1) Answer - Pays the market price (ask/bid) to buy or sell
stock immediately.
Limit Order (Chp. 1) Answer - Specifies the max buying price or min selling
price and not fulfilled until that price is avaliable.
Stop Loss Sales Order (Chp. 1) Answer - Specifies that the stock is sold if the
price decreases to the specified amount.
Long Position (Chp. 1) Answer - Positive number of units in which the
instrument was bought.
Short Position (Chp. 1) Answer - Negative number of units in which the
instrument was sold.
Short Selling Purposes (Chp. 1) Answer - 1) Speculation
2) Financing
, 3) Hedging
Lease Rate (Chp. 1) Answer - The annual cost of holding an asset as a
percentage of the asset value.
Repo Rate/Short Rate (Chp. 1) Answer - Repo: interst rate paid by the lender
for bonds.
Short: interst rate paid by the lender for stocks.
Cost of Capital (Chp. 2) Answer - Interest rate paid to investors of the project.
NPV [Formula] (Chp. 2) Answer -
NPV Perpetuity [Formula] (Chp. 2) Answer - NPV = 1/i
NPV Growth Rate [Formula] (Chp. 2) Answer - NPV = 1/(i-g)
Break - Even Analysis (Chp. 2) Answer - Determine the value of each
assumption parameter for which the NPV is 0.
IRR (Chp. 2) Answer - Internal Rate of Return
Sensitivity Analysis (Chp. 2) Answer - Caluclating the change in the NPV
resulting from a change in a parameter.
Scenario Analysis (Chp. 2) Answer - Calculate the NPV for various scenarios.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller EvaTee. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $27.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
75632 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now