Sharpe ratio Guides d'étude, Notes de cours & Résumés

CFA Level 1 Comprehensive Final Exam || With Complete Questions & Answers (100% Accurate) CFA Level 1 Comprehensive Final Exam || With Complete Questions & Answers (100% Accurate) If a company is liquidated, proceeds from asset sales are distributed to common shareholders: A before unsecured debt investor and preferred shareholder, claims are paid B after secured debt investor and preferred shareholder, claims are paid C after preferred shareholder claims are paid but before unsecured ...

Nominal vs Real Interest Rate (+ Equations)Nominal interest rate: the growth rate of your $ as quoted on the investment Real interest rate: the growth rate of your purchasing power Approximation: r(r) = r(n) - i Exact: r(r) = (1+r)/(1+i) - 1 Fisher equation: r(n) = r(r) - E(i) What does the Sharpe Ratio measure?It is equal to the risk premium of portfolio divided by standard deviation. It measures tradeoff between return and risk. Three properties of a normal distribution1) Symmetric ...

§Perpetuity FORMULA - •PV = PMT/I §Sharpe Ratio FORMULA - •(Return - risk-free rate) / standard deviation §CAPM FORMULA - •ri = rRF + (rM - rRF)bi What is the time value of money? - The concept that money you have now is worth more than the identical sum in the future due to its potential earning capacity. §Why is inflation so important for cash flows? - Important for inflation, a dollar is worth more today than in the future due to interest rates increasing. HOW DOES COMPOUNDIN...

When doing FX calculations correct answer: When you do FX calculations, you should make the domestic currency the PRICE currency (so keep this in mind if a question gives the domestic currency as the BASE currency. If so, you have to flip it) Advising people depending on whether they exhibit emotional or cognitive biases (Schweser Practice Book 2, Exam 2, Morning #4C correct answer: For people that exhibit emotional biases, you should focus on explaining how an investment program affects is...

FNCE 401 Final Exam All Possible Questions and Answers 2024/2025 Fully Solved 100%;Athabasca University FNCE 401 Final Exam All Possible Questions and Answers 2024/2025 Fully Solved 100% Part I – Multiple Choice Questions: (25 × 2 = 50 marks) 1. Corporate shareholders are best protected from incompetent management decisions by a. the ability to engage in proxy fights. b. management's control of pecuniary rewards. c. the ability to call shareholder meetings. d. the threat...

FINC 340 Questions Correctly Answered. An investor deposited $10,000 into a portfolio at the beginning of the year. The portfolio increased by 8% by the end of the year. The investor withdrew half his funds and left the remaining on deposit. These funds increased by 20% over the next year. The investor then closed his account. What is the investor's two year holding period return? - CORRECT ANSWER A. 8.0% B. 14.0% C. 16.6% **D. 18.8% E. 20% Strategic asset allocation identif...

Price change based on convexity correct answer - -duration(change in yield)+1/2(convexity)(change in yield)^2 Effective Duration correct answer - Required if a bond has embedded options: [(v-)-(v+)]/[2V0(change in curve)] Modified Duration correct answer - [(v-)-(v+)]/[2V0(change in yield)] Future Value correct answer - PV(1+(I/Y)^N) PV correct answer - FV/(1+r)^n PV of perpetuity correct answer - PMT / discount rate Approximate percentage price change of a bond correct answer ...

What is multiple Expansion? Basically when a company valuation increase with the EBITDA not changing What is Internal Rate of Return? A time-weighted metric that tells you what your compounded rate of return would be if you invested your money today and it grew at that rate over your investment horizon What is the difference between IRR and WACC? WACC: It is the minimum expected return one must expect given the risk profile of the asset / company IRR: Is the actual rate of return on an invest...

Cumulative Return - Answer The cumulative return is the total change in the investment price over a set time—an aggregate return, not an annualized one. (price[t]/price[0]) - 1 normalization from when stock was purchased Daily return - Answer (Today's stock price[t]/yesterday's stock price[t - 1]) - 1 sharpe ratio formula - Answer s = sqrt(252) * mean(daily_ret - daily_riskFree) / std(daily_ret - daily_riskFree) limit order - Answer A limit order is an order to buy o...

David, a senior analyst with a brokerage firm, decides to change his recommendation for the common stock of Pigeon Industries, Inc. from a "buy" to a "sell". This change in investment advice is mailed to all the firm's clients on Wednesday. Next day, a client calls in with a buy order for 500 shares of Pigeon Industries, Inc. In this circumstance, Johnson should: - Answer Advise the customer of the change in recommendation before accepting the order. The mosaic theory holds that an an...