Quantitative methods Time value of money Effective annual rate (EAR) Effective annual rate (EAR) = (1+stated annual rate/frequency‚ m) ^ m-1 Annuities Ordinary annuities: cash flow at the end of each period‚ normal one; Annuities due: cash flow at the beginning of each period‚ first payment =t0; Calculator setting: [2nd][BGN]-[2ND][SET]; same procedure for setback to END; Payment at beginning of next three years‚ N=4‚ always +1 using annuities due It is a BGN question‚ if first payment is today
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until you find one that would have worked in the past is called _______. A. data mining B. perceived patterning C. pattern searching D. behavioral analysis 2. Models of financial markets that emphasize psychological factors affecting investor behavior are called _______. A. data mining B. fundamental analysis C. charting D. behavioral finance 3. The trin statistic is a ______ indicator. A. sentiment B. flow of funds C. market structure D. fundamental 4. The put/call
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corrected internally‚ it will mislead the public as well as themselves in the organization itself. Thus‚ investors are more interested in investing in the business managed by honest managers who provide useful information that enable them to analyze the
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As many investors now say‚ it is getting harder to find value in choosing stocks and acquiring companies particularly successful ones. This is why in 2001 Warren Buffet said “We need elephants to make significant gains now-and they are hard to find” This is very similar to today’s valuations of companies that are now back to all-time highs so it is more difficult to find intrinsic value in a company. As Mr. Buffet many times has said there needs to be intricsic value when investing which he defines
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difficult it is to add value to businesses that aren’t connected to each other in some way. As a result‚ unlikely pairings have largely disappeared. Still many executives believe that diversifying into unrelated industries reduces risks for investors or that diversified businesses can better allocate capital across businesses than the market does – without regard to the skills needed to achieve these goals. Because few have such skills‚ diversification instead often caps the upside potential
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Text Discussion Questions 1. Discuss market bubbles and offer an opinion on why you think investors have trouble spotting bubbles. 10-1. Markets are not always rational and the herd instinct of following the crowds often causes investors and others to ignore the signs that point to a bubble. Bubbles catch professional investors as well as the novice. 2. Describe the three heuristics that investors use as “rules of thumb.” 10-2. 1) Representativeness: People assess the chances of an event
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man‚ Christopher Hitchens‚ in his letters‚ “Letters to a Young Contrarian” (2001)‚ implies that people of the contemporary society should avoid thinking other than for themselves by taking on the pathway of being a contrarian. His purpose is to help “individuals on how they think‚ and not what they think by making them a more independent and questioning person” (63). The letters take us through a pathway of what is means to be a contrarian. He uses great personal and current examples to explain why
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Solution to Derivatives Markets: for Exam FM Yufeng Guo June 24‚ 2007 www.guo.coursehost.com c °Yufeng Guo ii Contents Introduction 1 Introduction to derivatives 2 Introduction to forwards and options vii 1 7 29 79 129 141 3 Insurance‚ collars‚ and other strategies 4 Introduction to risk management 5 Financial forwards and futures 8 Swaps iii CONTENTS CONTENTS www.guo.coursehost.com c °Yufeng Guo iv Preface This is Guo’s solution to Derivatives Markets (2nd edition ISBN 0-321-28030X)
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franchises. Instead of competing with each other‚ the analysts supported one another; many had open door policies. Each analyst strove to become ranked by the Institutional Investor Magazine II; although many considered the success of the research department as wholly if not more important. It was common for RSH employees to develop contrarian views on stock. Teamwork led to superior company coverage. As an additional incentive to teamwork‚ the director of research tied analyst’s bonus not only to individual
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Email: madihalmalik@yahoo.com Abstract Market efficiency hypothesis suggests that markets are rational and their prices fully reflect all available information. Due to the timely actions of investors prices of stocks quickly adjust to the new information‚ and reflect all the available information. So no investor can beat the market by generating abnormal returns. But it is found in many stock exchanges of the world that these markets are not following the rules of EMH. The functioning of these stock
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