Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

HS328 Investment Planning > Last stitch effort > Flashcards

Last stitch effort Flashcards

(50 cards)

Start Studying
1
Q

Which act requires disclosures of new securities in the primary market

A

The Securities Act of 1933

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Which act focuses on the trading of securities in the secondary market

A

The Securities Exchange Act of 1934

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Which act regulates investment advisers and requires registration with the SEC for firms or any individual advisers with assets under management exceeding $100 million.

A

The Investment Advisers Act of 1940

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Which act forms the backbone of financial regulation and established the foundation for mutual funds and hedge funds.

A

The Investment Company Act of 1940

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Which efficient market hypothesis believes that market prices are functions of historical prices and volume.

**Asset prices reflect only historical pricing and volume information.

**Technical analysis does not result in out-performance.

A

Weak Form Efficiency

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Which efficient market hypothesis believes that market prices are functions of publicly available information

**includes data such as firm information as well as economic information.

** fundamental analysis will not result in out-performance.

A

Semi-Strong Form Efficiency

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Which efficient market hypothesis believes that market prices are functions of all relevant information (which includes private information plus bot the first and second data set)

**asset prices reflect all relevant information, including private information, therefore technical analysis fundamental analysis, nor the use of private information result in performance.

A

Strong Form Efficiency

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Annualized Return formula

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Geometric Mean Return formula

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

If the question wants me to solve for Dollar Weighted Return what function on the calculator do you solve for?

A

IRR

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Treynor formula

A

Portfolio Return - Risk-Free Rate
/
Beta

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Sharpe formula

A

Portfolio Return - Risk-Free Rate
/
Standard Deviation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Jensen Alpha formula

A

Portfolio Return -
[Risk-Free Rate + Beta (Market Return - Risk-Free Rate)]

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Approximately 95% of outcomes fall within __________ standard deviations from the mean

A

2 standard deviations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Approximately 99% of outcomes fall within __________ standard deviations from the mean

A

3 standard deviations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

when calculating standard deviations which two variables are used?

A

weight & standard deviation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

CAPM formula

A

Rf+b (Rm-Rf)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

the point of tangency where ________ & ________ meet is referred to as the market portfolio, which is a portfolio of all risky assets

A

CML & efficient frontier

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Total Market Value formula

A

Operating Cash Flow
/
(Required Rate of Return – Dividend Growth Rate) 

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Total Market Value / Outstanding Shares

A

Intrinsic Value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

what is the primary purpose for a money market account?

Study These Flashcards
A

to give investors exposure to money market securities through indirect ownership.

22
Q

A fixed-income security that is not backed by any specific collateral is known as a

23
Q

Accrued Interest formula

Study These Flashcards
A

Semi-Annual Coupon Payment * Days since last coupon payment
/
Days in coupon period

24
Q

Treasury bonds are subject to which type of taxation?

25
Municipal Bonds are subject to which type of taxation?
No taxation unless the owner of the Muni bond lives in a different state where the Muni Bond is from, then the investor must pay state taxation.
26
Corporate bonds are subject to which types of taxation?
Federal and State
27
Annual coupon payment in dollars / Current market price =
Current Yield formula
28
If interest rates increase, then bond prices will _______ while the returns on reinvested coupons will _______.
decrease, increase
29
Dividend / EPS =
Payout Ratio
30
(net income - preferred stock dividends) / weighted average number of common shares outstanding =
Earnings Per Share
31
Total annual dividends per share / Stock price =
Dividend Yield
32
An investor who sells a stock short
must cover any dividends payments made by the issuing company.
33
Maintenance Margin formula
Account Value - Debt / Account Value
34
Account Value formula
Debt / (1-maintenance margin)
35
traditional UIT invest solely in
bonds
36
this type of fund has a fixed capitalization, since they cannot issue additional shares to the public
closed-end investment companies.
37
AKA mutual fund. is the most common investment company used by investors, the fund manager continually accepts new capital and continually redeems shares.
Open-End Investment Company
38
Net Asset Value formula
market value of assets - market value of liabilities / Total outstanding shares
39
The primary purpose of derivatives
to transfer risk among market participants. Derivatives may be used to hedge against risk or to seek higher returns with a speculative investment.
40
what is the riskiest position for an options trader?
shorting a stock
41
Which options strategy could limit downside risk without costing anything out of pocket?
A collar
42
Which options strategy involves buying a call option to protect a short position?
Protective Call
43
Which options strategy involves combining a long position and a long put option?
Protective Put Is also known as portfolio insurance.
44
which options strategy involves combining a long put and a long call, with the same strike price and expiration date?
long straddle
45
which options strategy involves combining a short put and a short call, with the same strike price and expiration date?
short straddle
46
when does an investor use a long straddle?
when they believes that the price of the security is likely to move up or down significantly, but don't know which way it will go.
47
when does an investor use a short straddle?
when they believe that the price of the security is fairly stable. If correct, the investor will keep the premium for both options, however the investor has unlimited loss potential.
48
strangle
is the same thing as a straddle except it does not have the same strike prices and expiration dates.
49
According to the Black-Scholes option pricing model, the value of a call option will decrease
As the exercise price increases
50
A covered call is the most appropriate strategy for investors looking for
additional income from a stock they already own

HS328 Investment Planning (9 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions