Investments Flashcards
1
Q
Formula for quoted yield of T-Bill
A
gain x (365/days to maturity)
2
Q
Market/Systematic Risk
A
risk that cannot be eliminated with diversification. inherent risk of being in the market
3
Q
Availability Bias
A
Only making decisions based on limited available info
4
Q
Hindsight bias
A
“I saw it coming”
5
Q
Prospect theory
A
Cannot tolerate losses
6
Q
Scope neglect
A
Can handle big problems, but not small ones
7
Q
Endowment
A
Overvaluing ones possessions
8
Q
Sharpe Ratio
A
(Return - risk free return) / Standard Deviation
9
Q
MFDA coverage amount?
A
$1million
10
Q
When do you buy puts?
A
When expecting price drop
11
Q
When do you buy calls?
A
When expecting price to rise
