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Investments Flashcards

(8 cards)

1
Q

Yield Ladder

A

Discount at the YMCA

YTC
YTM
CY
Annual coupon/nominal yield

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2
Q

Corporate and muni bond risk

A

DRIP

Default risk
Reinvestment risk
Interest rate risk
Purchasing power risk

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3
Q

Government bond risk (no zeros)

A

RIP

Reinvestment risk
Interest rate risk
Purchasing power risk

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4
Q

Option intrinsic value

A

COME
Call Option= market- exercise

POEM

Put Option = exercise-market

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5
Q

Systematic risk (Beta, nondiversifiable)

A

PRIME

Purchasing power
Reinvestment
Interest
Market
Exchange rate

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6
Q

Security Market Line (SML)

Capital Market Line (CML)

A

SML= smol, micro, stock
CML=macro (marcowitz)

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7
Q

Standard Deviation

A

Total risk (two words)

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8
Q

Stock Ratios

A

60 Big Rats

R2 > 60
Alpha (highest)
Treynor (if alpha not provided)

R<60
Sharpe (highest)

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