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CFA- Fixed income > CFA- Fixed Income > Flashcards

CFA- Fixed Income Flashcards

Quick reference

1
Q

Capital Indexes bond will only increase in principal and

A

the interest stays the same

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2
Q

which of the bond will earn interest on a implied basis

A

Pure Discount bond

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3
Q

domestic issued + foreign currency

A

Foreign bond

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4
Q

Internationally issued + Foreign Currency

A

euro bond

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5
Q

Higer residual value

A

lower amortization in the first year

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6
Q

never mention acquistition dates on

A

Footnotes of Financial statements

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7
Q

cannot change from Fair value when

A

transactions become less frequent compared to others

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8
Q

effective tax rate

A

income tax payable + changes in DTL/DTA/ebt

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9
Q

DECREASE IN VALUATION ALLOWANCE MENAS

A

FEELING GOOD MORE EARNING POWER

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10
Q

any expense realized goes to

A

income satatement

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11
Q

credit is

A

gain

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12
Q

denit is

A

loss

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13
Q

lesses disclosure about operating leases

A

future obligations

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14
Q

lesses disclosure about operating leases

A

future obligations

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15
Q

revenue is higher in a

A

sales type lease

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16
Q

interest income is recorded on a

A

capital lease

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17
Q

interest income is recorded on a

A

capital lease

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18
Q

debt/total capital

A

debt/(debt+equity)

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19
Q

arritbute of optimal in financial reporting spectrum

A

sustainable and adequate returns

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20
Q

ineffective board of directors is

A

opportnuity

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21
Q

bonus is m

A

motivation

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22
Q

cross over rate has same

A

NPV

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23
Q

VERICAL AXIS

A

SUM OF UNDISCOUNTED CASH FLOWS CROOSES AT

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24
Q

HORIZONTAL AZIX

A

IRR WHERE NPV IS ZERO

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25
Q

LEST LIKELY TO INCLUDE IN CAPITAL BUDGETING

A

INTEREST COSTS

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26
Q

INCLUDE

A

OPPORTUNITY COST AND EXTERNALITIES

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27
Q

Cost of equity

A

expected rate of return by stockholders

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28
Q

increase in debt to equity will only rise

A

equity beta the asset beta will remain the same

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29
Q

always use the new beta information

A

for future projects

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30
Q

rate or yeild to maturity on par bond is

A

coupon rate

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31
Q

retention rate

A

1 - payoutrate

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32
Q

country premium ration

A

(countrty bond%- usbond%) (Equity index/Debt index)

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33
Q

total leverage

A

operating leverage + financial leavrage (bothe effect netincome
)

34
Q

total leverage

A

% change in net income / % change in units sold

35
Q

nominal risk free rate

A

real rate + expected inflation

36
Q

geometric return

A

time weighted return

37
Q

money weighted return

38
Q

Descreptive statistics

A

population

39
Q

cumuliative relative frequency

40
Q

mode

A

highest number repating

41
Q

median

A

low high cancel out

42
Q

same investment every year and calc the average using

A

harmonic mean

43
Q

Mean Absolute deviation

A

First mean then Absolute is mean - values take the positive and then the mean again

44
Q

chevy inequality

A

1- 1/k2 * number of observations

45
Q

(max-mean)/Standard deviation is

A

K in chevys

46
Q

highest sharp ratio

A

is riskiest and the manger is performing well

47
Q

sharp ratio

A

(return on portfolio - risk free rate)/ Standard deviation

48
Q

highest sharp ratio

A

highest return for every risk number shows the better performance

49
Q

-ve skew and higher krutrosis

A

has greater number of extreme returns

50
Q

positive skew

A

mode< median< mean

51
Q

-ve skew

A

mode>median>mean

52
Q

geometric mean measures

A

investment growth over mutiple periods

53
Q

symetric mean = skew

A

all mean mode and median are equal

54
Q

expected value in probability

A

is product of number and % like the weighted avergae

55
Q

variance

A

product of % (value-expected value or average)

56
Q

square root of variance is

57
Q

coveriance less than zero

58
Q

coveriance greater then zero

59
Q

coveriance = 0

A

no relataionship

60
Q

Exhaustive

A

everything or all

61
Q

people

A

subjective

62
Q

unique coveriances

63
Q

probability distrubution to standard deviation formuale

A

calculate the weighted average then

product of probability * (averge -calcvalue)2 ….. then sqaure root

64
Q

DISCRETE - COUNTABLE

A

CONTINIOUS - NON COUNTABLE

65
Q

DISCRETE - COUNTABLE

A

CONTINIOUS - NON COUNTABLE

66
Q

Mean + 2/3 standard deviation

67
Q

Mean + 1 standard deviation

68
Q

Mean + 2 standard deviation

69
Q

Mean + 3 standard deviation

70
Q

confidence intervals 90%

A

mean +- 1.65

71
Q

confidence intervals 95%

A

mean +- 1.96

72
Q

confidence intervals 99%

A

mean +- 2.58

73
Q

1 + Holding period return

A

lognornmal distribution and it cant be negative

74
Q

kurtosis of 3

A

normal distribution

75
Q

continious compunding return

A

naturnal log (ending value/begining value)

76
Q

continious

A

any specific value is zeo range is incrementak

77
Q

monte carlo

A

test to sensitivity with parameters doesnt require historic numbers and cant specify casuse and effect to independent relationships

78
Q

standard error

A

variance / number of trails

79
Q

Central Limit therom

A

tells us mean of mean of samples might be eqaule to mena of popluation

80
Q

always disclose

A

your personal transactions to employers

CFA- Fixed income (2 decks)

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