investment exam

MGF-402-Fall-Midterm helper.

Chapters 1-5, 9. There a few light concepts from chapters 6, 7, & 8 that were

covered in class. Chapter 5 ends at slide 26. You will not need to calculate

standard deviation, variance or covariance.

Chapter 11 is not on exam.

Real assets vs financial assets.

What are the reasons to use a derivative security?

Conflicts of interest between the management team and the shareholders.

SOX act.

Money market security vs capital market security.

Understand different types of municipals and tax equivalent yield.

Given a bond’s quoted price and par value, be able to calculate amount dollar amount of bond.

Be able to define different types of orders.

There are a few questions on margin. This is only on the purchase side, I do not have a margin question

on a short sale.

In general terms, understand the how a short sale works. Understand how you make money and the

risks involved.

Be able to calculate NAV.

Understand the difference between open-end and closed end funds.

Have a general idea of investment company fees.

Holding period return.

General idea of stocks, bonds, cash including returns and risks.

Review compounding. Example: Given a quarterly rate, what is the effective annual rate?

Risk-adverse investors.

Mean-variance efficiency.

Systematic vs non-systematic risk.

General understanding of covariance and correlation.

CAPM and beta. Be able to calculate required/expected return. Tuesday’s/Thursday’s class.

Know your market data.

Have general knowledge of the portfolio building process that we discussed in class.

This covers many of the items on the test. Focus on these areas. I suggest that you make a one or two

page “cheat-sheet” for yourself.

Test is done through Connect and will have the browser locked down.