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what is median
what are leading economic indicators
work week, building permit, S&P 500,inflation adjusted M2
what are coincident indicators
industrial production, and number of employees on payroll.
.what are lagging indicator
unemployment claim, change in Consumer Price Index
does a value stock have a high or a low P/B
growth stock has a high P/E, high P/E, and high Beta. Why?
noodle it out
What is the capital asset pricing model?
used to determine expected return on a diversified portfolio
What is Alpha
return that is an excess of the capital asset pricing model
If a stock has a beta of 1 and a return of 12% is the stock under or over valued? Assuming a beta of 1 has an expected return of 10%
what Is the risk premium?
the rate of return on investment that is an excess of the rIsk free return.
what does the efficent market hypothesis state?
everything to be known as already known, there is no way to beat the market
what are the three forms of the efficient market hypothesis
- weak =fundamental analysis
- Semi- strong - insider trading
- Strong - impervious to prediction
what does a fundamental analyst study
the company's financial statement
what are the three main financial statements
the balance sheet the income statement and the statement of cash flow
what three things does the balance sheet provide
- shareholders equity.
what is the balance sheet equation
assets = liabilities + shareholders equity
what is the spot exchange rate
the current exchange rate
what is the forward exchange rate
and exchange rate that is quoted and traded today but delivered later
how do publicly traded companies file information with the SEC
- through the EDGAR system
A thinly traded issue has what kind of risk?
what kind of liquidity does the current ratio measure
short term liquidity
limited partnerships have what kind of risk
what is a thin market
- when very few shares are for sale or purchase in the secondary market.
- also known as liquid the rIsk
Risk-adjusted return may be measured by what ratio
the Sharp ratio
what is found on the balance sheet
what is found on the income statement
- Net income
how do you find an investor's net worth
- Assets - liabilities
- found on the investors balance sheet
How do the various financial statements interact
Net income ☞ balance sheet ☞ retained earnings
List the parts of the balance of payments account
- Balance of trade acct
- Current acct
- Balance of payment acct
what does systematic risk include
- market risk
- risk exchange rate
- interest rate risk
what does unsystematic risk include
- business risk
- regulatory risk
- political risk
- liquidity risk
What are the four components of shareholder equity
- Preferred stock at par
- Common stock at par
- paid in surpluse
- retained earnings