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97 Cards in this Set
- Front
- Back
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Current ratio = total assets/ total ____ |
Liabilities |
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Another word for systematic risk is _____ |
Market risk |
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Qualified dividends are subject to ______ |
Taxation |
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If purchased in a retail account, all dividends are subject to _____ |
Taxation |
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Money market securities are defined as debt instruments with less than _____ years until maturity |
1 year |
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Zero coupon bonds are subject to _______ risk |
Interest rate |
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Bonds with ____ coupons are more subject to interest rate risk |
Lower coupons |
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Tactical asset allocation strategies are more _____ than strategic |
Active/ aggressive |
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Strategic asset allocation is more ____ than tactical asset allocation |
Passive |
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Efficient market hypothesis states that is it unlikely to ______ the market over an extended period |
Outperform |
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Internal Rate of Return is a method for determining the ____ of a project |
Profitability |
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Value stocks have _____ price/earnings ratio |
Low |
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______is considered a large cap index |
DJIA |
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______is considered a large cap index |
DJIA |
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________ is considers a small cap index |
Russell 2000 |
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A stop order becomes a _____ order |
Market |
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Federal covered advisers are _________ from record keeping requirement s |
Exempt |
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Investment advisory firms are required to keep books and record for a minimum of ___ years |
5 years |
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_______ approach is used when specific industries are identified that would benefit from the anticipated future economic conditions |
Top down |
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_________ returns measure the performance of an investors actual investment over a defined period |
Dollar weighted returns |
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_________ returns measure the performance of an investors actual investment over a defined period |
Dollar weighted returns |
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__________ returns assumes that a fixed dollar amount was invested and then measure how that amount would have performed over a defined period |
Time weighted return |
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Value stocks have
1. ______ price/earnings ratio 2. _______ dividend payouts 3. ________ price/book value |
Low P/E ratio High dividend payout Low price/book ratio |
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Form ____-K is filed when material corporate events that shareholders should know about happen
Ex: one company merging with another |
8-k |
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_________ returns measure the performance of an investors actual investment over a defined period |
Dollar weighted returns |
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__________ returns assumes that a fixed dollar amount was invested and then measure how that amount would have performed over a defined period |
Time weighted return |
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Value stocks have
1. ______ price/earnings ratio 2. _______ dividend payouts 3. ________ price/book value |
Low P/E ratio High dividend payout Low price/book ratio |
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Form ____-K is filed when material corporate events that shareholders should know about happen
Ex: one company merging with another |
8-k |
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_____________ is a method of estimating the fair market price of an investment |
Discounted cash flow |
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_________ returns measure the performance of an investors actual investment over a defined period |
Dollar weighted returns |
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__________ returns assumes that a fixed dollar amount was invested and then measure how that amount would have performed over a defined period |
Time weighted return |
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Value stocks have
1. ______ price/earnings ratio 2. _______ dividend payouts 3. ________ price/book value |
Low P/E ratio High dividend payout Low price/book ratio |
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Form ____-K is filed when material corporate events that shareholders should know about happen
Ex: one company merging with another |
8-k |
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_____________ is a method of estimating the fair market price of an investment |
Discounted cash flow |
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If an investment is trading at a value lower than its discounted cash flow value, the investment is considered to be __________ |
Attractive |
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_________ returns measure the performance of an investors actual investment over a defined period |
Dollar weighted returns |
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__________ returns assumes that a fixed dollar amount was invested and then measure how that amount would have performed over a defined period |
Time weighted return |
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Value stocks have
1. ______ price/earnings ratio 2. _______ dividend payouts 3. ________ price/book value |
Low P/E ratio High dividend payout Low price/book ratio |
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Form ____-K is filed when material corporate events that shareholders should know about happen
Ex: one company merging with another |
8-k |
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_____________ is a method of estimating the fair market price of an investment |
Discounted cash flow |
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If an investment is trading at a value lower than its discounted cash flow value, the investment is considered to be __________ |
Attractive |
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The biggest disadvantage to investing in growth funds is the potential loss of |
Principal |
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The ________ rate of return states how much an investor makes over a one year period |
Annualized |
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The ________ rate of return states how much an investor earns over the period an investment is held |
Holding period |
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A diversified portfolio should be comprised of assets that are ________ |
Largely un correlated |
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___________ never generate capital gains |
Annuities |
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__________ = total current assets - total current liabilities |
Working capital |
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_________ approach is based on fundamental analysis. It finds stable companies that have a history of profits and de-emphasizes economic and market cycles |
Bottom up |
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What are the three basic components of the MPT
Expected return 2. 3. |
Standard deviation and correlation |
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Name the two specific risks associated w CAPM |
Diversifiable and non-diversifiable |
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Name the two specific risks associated w CAPM |
Diversifiable and non-diversifiable |
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Buy and hold is a ______ strategy |
Passive |
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Name the two specific risks associated w CAPM |
Diversifiable and non-diversifiable |
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Buy and hold is a ______ strategy |
Passive |
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Systematic rebalancing is a ______ strategy |
Passive |
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Sector rotation is a _______ strategy |
Active |
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Name two defensive stocks |
Utility, drug manufacturers, grocery stores |
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Sector rotation is a _______ strategy |
Active |
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Name two defensive stocks |
Utility, drug manufacturers, grocery stores |
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_______ stocks are considered to have high risk and wide fluctuations |
Speculative |
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Name 2 types of unsystematic risk |
Business risk Liquidity risk Opportunity cost Currency risk |
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_______ risk is the risk that a bond issuer will not make payments as promised |
Credit |
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Name 2 types of unsystematic risk |
Business risk Liquidity risk Opportunity cost Currency risk |
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_______ risk is the risk that a bond issuer will not make payments as promised |
Credit |
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US government debt securities have no ______ risk |
Credit |
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_______________ is found by adding prices paid per period and dividing by the number of periods |
Average price per share |
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_______________ is found by adding prices paid per period and dividing by the number of periods |
Average price per share |
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Is found by adding the total amount invested and dividing by the number of shares purchased |
Average cost per share |
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Future value formula
Pn = |
Pn = Po (1+r)n |
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Future value formula
Pn = |
Pn = Po (1+r)n |
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Present value
Po = |
Po = Pn/ (1+r)n |
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Future value formula
Pn = |
Pn = Po (1+r)n |
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Present value
Po = |
Po = Pn/ (1+r)n |
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The yield to maturity of a bond is essentially its __________ rate of return |
Internal |
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_____ is a method of estimating the fair market value of an investment |
Discounted cash flow |
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A _______ stop order is always places below the current market price of the stock |
Sell |
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A _______ stop order is always places below the current market price of the stock |
Sell |
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A ______ order is an order to either buy or sell stock once the market price of the stock reached a specific price |
Stop order |
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Most hedge funds are structured as ________ |
Limited partnerships |
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Are REITs liquid? |
Yes |
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If a stock is thinly traded, what type of risk is most significant |
Liquidity risk |
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_________ is the difference in return between an investment made and one that is not made |
Opportunity Cost |
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_______ rate of returns are used to compare the performance of two money managers |
Time weighted |
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______ - form efficiency believes in fundamental analysis and that actively managed portfolios will help investors |
Weak form |
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_______ - form efficiency believes that the only way to gain an advantage over the long term is to have access to non public information
They do not believe in fundamental or technical analysis |
Semi-Strong form |
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______ - form efficiency believes in fundamental analysis and that actively managed portfolios will help investors |
Weak form |
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_______ - form efficiency believes that the only way to gain an advantage over the long term is to have access to non public information
They do not believe in fundamental or technical analysis |
Semi-Strong form |
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______ - form efficiency, believe in a more Passive approach and think that proper asset allocation is the best approach to long term investing |
Strong form |
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CAPM attempts to describe the relationship between _____ and _____ for securities |
Risk and expected return |
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Modern portfolio theory says that investors want to take the ________ risk possible and obtain the _________ possible return |
Low risk high return |
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__________ is the degree to which different investments move in the same direction in the market in which they trade |
Correlation |
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_______ weighted returns eliminate biases caused by the inflow or outflow of investor money from an account over time |
Time weighted |
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_______ weighted returns eliminate biases caused by the inflow or outflow of investor money from an account over time |
Time weighted |
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______ weighted returns provide a better idea of how an investor has done over time by eliminating the biases caused by superior performance in one year or inferior in another |
Dollar |
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To be considered suitable to purchase Hedge funds, you need an annual income of at least ______k or a liquid net worth of at least ______M |
200k 1M |
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Testamentary trusts do not avoid ______ |
Probate |
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In a testamentary trust, the ______ will control all of the trust assets in her lifetime |
Donor |
