CFA Chartered Financial Analyst Study guides, Class notes & Summaries

Expected Return on a Portfolio - Composed of n assets with weights w and expected returns r Covariance of asset returns - Is a measure of how two assets move together. It is the expected value of the product of the deviations of the two random variables from their expected values

Default Risk - Risk that a borrower will not make promised payments Liquidity Risk - Risk of recieving less than fair value for an investment if it must be sold for cash quickly Required Interest Rate on A Security - = Nominal Interest Rate + Default Risk Premium + Liquidity Premium + Maturity Risk Premium

Bond Indenture -Contract that specifies all the rights and obligations of the issuer and owners of a fixed income security. Negative Covenants - Prohibitions on the borrower.

Price Elasticity of Demand Formula - (% Change in Quantity Demanded) / (%t Change in Price) Cross Elasticity of Demand Formula - (% Change in Quantity Demanded) / (% Change in Price of Substitute or Complement)

Current Ratio -Current Assets divided by current liabilities Quick Ratio -Cash plus marketable securities plus receivables divided by current liabilities

Can you initiate coverage on a company that is a potential client? - Yes - as long as the recommendation is not unjustifiably favorable Tender Offers - Mat., non-pub info -> can't use! To be GIPS compliant, a firm must adopt: -the broadest definition of the firm *presented annually, to all clients

Can you initiate coverage on a company that is a potential client? - Yes - as long as the recommendation is not unjustifiably favorable Tender Offers - Mat., non-pub info -> can't use! To be GIPS compliant, a firm must adopt: - the broadest definition of the firm *presented annually, to all clients

Bond Indenture - Contract that specifies all the rights and obligations of the issuer and owners of a fixed income security. Negative Covenants - Prohibitions on the borrower.

Default Risk - Risk that a borrower will not make promised payments Liquidity Risk - Risk of recieving less than fair value for an investment if it must be sold for cash quickly

Price Elasticity of Demand Formula - (% Change in Quantity Demanded) / (%t Change in Price) Cross Elasticity of Demand Formula - (% Change in Quantity Demanded) / (% Change in Price of Substitute or Complement)