Investment Planning Flashcards
(43 cards)
Beta of Index Funds that track the market
1
As a measure for risk, the Capital Market Line uses the:
Standard deviation of the market
On the Markowitz Model, at the point of tangency, we have attained:
The optimal portfolio.
Shares repurchased by the corporation
Treasury shares
D1
Next expected dividend
D1 = current year dividend (1 + dividend growth rate)
In order to determine whether a stock is overvalued or undervalued, a planner would use which of the following formulas?
Intrinsic value formula
Debunture
Unsecured corporate debt
Treasuries maturity times
Treasury Bills - up to 52 weeks
Treasury Notes - 2 to 10 years
Treasury Bonds - greater than 10 years, typically 30 years
Bonds owned by whoever possesses them
Bearer bonds
Maintenance Margin
Price = Loan / (1 - MM)
The entity that establishes the initial margin requirement:
Federal Reserve
Long Hedge Position
The investor is short the underlying commodity and long the futures contract
To be on a corporations books as a holder-of-record (right to the next dividend payment) the investor must purchase stock:
Before the ex-dividend date
Market where exchange and broker dealer services are eliminated completely:
The fourth market
Effect of sale of Treasury securities
Reduction of cash in the market place causing an increase to the cost of money and a lessening of funds for investment
Holding period return
Holding Period Return = Selling Price - Purchase Price +/- Cashflows / Purchase Price or Equity Invested
If the risk/return performance of a stock lies above the SML, the stock is said to have a:
Positive alpha
On the Markowitz Model, at the point of tangency l, we have obtained:
The optimal portfolio
Capital Market Line uses:
Standard deviation of the market
Security Market Line uses:
Beta as it’s risk measurement
The Securities Act of 1933
Regulates both initial and public offerings and subsequent secondary offerings by a public company
Security Exchange Act of 1934
The legislation that concerns itself with securities in the secondary market
Red herring
A preliminary prospectus issued by the managing house of an offering
Capitalization method of valuation
Net earnings/capitalization rate factor
