Key things to remember! Flashcards
When reading bond prices for (US).
what does this mean:
BID ASK
102-01 , 102-05
Higher price is always when buying. selling at lower. ** very imp
For US the number at the back would be will be divided by 32.
for our case purchase would be 1k + 0.15625
Whats an IPS .
An investment policy statement (IPS) is a document drafted between a portfolio manager and a client that outlines general rules for the manager. This statement provides the general investment goals and objectives of a client and describes the strategies that the manager should employ to meet these objectives. Specific information on matters such as asset allocation, risk tolerance and liquidity requirements are included in an IPS.
**remember the IPS precedes any strategy decision.
What is the legal position of a REIT investor ?
Collective ownership
What are negative betas?
Means the investment is negatively related to the market. (e.g gold). As such it should perform better in a bear market (under performing).
what is beta?
beta (β or beta coefficient) of an investment indicates whether the investment is more or less volatile than the market as a whole. In general, a beta less than 1 indicates that the investment is less volatile than the market, while a beta more than 1 indicates that the investment is more volatile than the market. Volatility is measured as the fluctuation of the price around the mean: the standard deviation.
what are BVs not useful for?
service industry as their services are not tangible.
Unit trusts are not allowed to guarantee what?
Returns!
In singapore whats the minimum maintenance margin a client of brokerage has to maintain to prevent a margin call?
140%
Whats the diff between systemic and unsystematic risk
Unsystematic risk, also known as “specific risk,” “diversifiable risk” or “residual risk,” is the type of uncertainty that comes with the company or industry you invest in. Unsystematic risk can be reduced through diversification. For example, news that is specific to a small number of stocks, such as a sudden strike by the employees of a company you have shares in, is considered to be unsystematic risk. Systematic risk, also known as “market risk” or “un-diversifiable risk”, is the uncertainty inherent to the entire market or entire market segment. Also referred to as volatility, systematic risk consists of the day-to-day fluctuations in a stock’s price. Volatility is a measure of risk because it refers to the behavior, or “temperament,” of your investment rather than the reason for this behavior. Because market movement is the reason why people can make money from stocks, volatility is essential for returns, and the more unstable the investment the more chance there is that it will experience a dramatic change in either direction.
“Close out status” will be given when the margin erosion is at what percentage or more?
50%
“Margin Call Status”
25%
when there is a margin call status how long will the client be given to top up account?
2 days
In currency swaps what happens to the interest?
The are paid in full without WITHOUT! netting
If inflation rate increased. what would happened to the SML?
shift would be upwards in parallel
Diff between pref shares and ordinary
pref- no voting but will receive dividends and in event company falls they will receive funds first
The code of CIS indicates that (for money market funds) t 90% of securities should not have a term to maturity longer than ?
366 days!
