Needs to Know Easy Points

Question 1

Code of Ethics for Senior Officers

Answer 1

Honest and ethical conduct
Full, fair, and timely disclosures
Compliance with laws and regulations

Question 2

CEO & CFO Responsibilities fro Fin. Reports

Answer 2

Internal controls are made available
Internal controls effective as of 90 days prior to report
Conclusions of effectiveness

Question 3

Issuers Audit Committee Responsibilities

Answer 3

Appointment, compensation, and oversight of accountant
Resolves disputes between auditor and management
Independent board members (no affiliation or compensation
Whistle blower procedures that are confidential and retained

Question 4

Stated Interest Rate (SAR)

Answer 4

rate stated before any adjustments

Question 5

Effective Interrest Rate

Answer 5

Interest Paid per Period / Net Proceeds

Question 6

Annual Percentage Rate APR

Answer 6

Step 1: Find Effective Period Interest Rate
Step 2: ER x # Periods in a Year

Question 7

Effective Annual Interest Rate EAR

Answer 7

(1+EPR) ^#of periods - 1 compounding

Question 8

Simple Interest

Answer 8

P x SAR x # of Years

Question 9

Compound Interest

Answer 9

P x (1+EPR) ^ # of total periods of loan

Question 10

Nominal Rate of Return

Answer 10

Real rate + inflation premium
Risk free rate

Question 11

Inflation Premium IP

Answer 11

compensation required to bear risk that price level will change affecting buying power

Question 12

Required Rate of Return

Answer 12

Nominal RF + Interest Rate Premium + Liquidity Risk Premium + Default Risk Premium

Question 13

Interest rates vary more …

Answer 13

in the short term.