Revision Booklet Mnemonics Flashcards
Investment and risk characteristics of assets
SYSTEM T Security (risk) Yield (real/nom, running yield, expected return, compare to other assets) Spread (diversification, volatility) Term Exchange rate/expenses/economic conditions/expertise required Marketability Tax
Reasons to hold cash
POURS Protect monetary values Opportunities to take advantage of Uncertain outgo Recent cashflow Short term commitments
Economic situations where cash is attractive
GRID General economic uncertainty Recession Interest rates rising Depreciation of domestic currency
Theories of the yield curve
LIME Liquidity preference Inflation risk premium Market segmentation Expectations
Characteristics of prime property
Take a walk along CALL ST Comparables Age/condition/use/flexibility Location Lease Size Tenant
Difficulties in overseas investment/emerging markets
MTV
Mismatches domestic liabilities
Tax
Volatility of currency
Other problems with overseas investment/emerging markets
CATERPILLAR Custodian needed Addation admin Time delays Expenses/expertise Regulation poorer Political problems Information poorer Language difficulties Accounting differences Restrictions on ownership of assets/repatriation problems
External environmnet factors
CREATE GREAT LISTS Commerical issues e.g. underwriting Regulatation/legislation Environmental issues Accounting standards Tax Economic issues Governence Risk managment Experience from overseas Adequacy of capital Trends (demographic) Lifestyle considerations Institutional structure (mutual or proprietary) Social trends Tech State benefits
Functions of a regulator?
SERVICE Setting sanctions Enforce regulations Reviewing and influencing govt policy Vetting and registering firms and individuals Investigating breaches Checking management and conduct of providers Educating customers and public
Contract design factors?
Ample Direct Factors Admin systems Marketability Profitability Level and form of benefits Early leaver benefits Discretionary benefits Interests and needs of customers Risk appetite Expenses vs charges Competition Terms and conditions of contract Financing (capital requirements) Accounting implications Consistency with other products Timing of contribution to premiums Options and Gtees Regulatory requirements Subsidies (cross)
Expenses incurred by a product provider?
RAPID COST Renewal admin Asset management Profits Initial admin e.g. put on computer system Design of contract costs Commission Overheads Sales/advertising Terminal (benefits payouts)
Characteristics of well run projects
PROJECT CRAMPS Planning (full) Risk analysis is thorough Objectives are clear and meet customer needs Judge (monitor) development Excellent communications Conflict management Thorough testing
Critical path analysis
Relationships with suppliers challenging and stable
Appropriate pace so right things are done on time
Milestone review schedule
Performance and quality standards are set and measured
Supportive environment
Criteria assessed in intial appraisal
SPURS Synergies with other projects Political constraints Upside potential Results (financial) Scare resources
Contents of written strategy document
PROSE
Policies (financial, legal, tech, risk management, communications, IT)
Roles and responsobilities of sponsore and 3rd parties
Objectives identification, how to measure, quality standards and financial
Schedule of milestones and key points
Expected cost including insurance
Risk identification tools
DR RUB Desktop analysis Risk analysis Risk register Upside aswell as downside risks identified Brainstorming
