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Financial Analysis > Term > Flashcards

Term Flashcards

1
Q

Market Capitalization

A

Market-Value of shares: how much would it cost to purchase all shares of a company

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2
Q

Market-Value of shares: how much would it cost to purchase all shares of a company

A

Market Capitalization

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3
Q

Significance of Market Capitalization

A

higher price earning ratio => higher expectation of earnings growth

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4
Q

higher price earning ratio => higher expectation of earnings growth

A

Significance of Market Capitalization

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5
Q

Beta significance

A

measures the market-wide risk that cannot be eliminated through diversification

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6
Q

measures the market-wide risk that cannot be eliminated through diversification

A

Beta significance

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7
Q

Beta = 0

A

value not related to the market

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8
Q

value not related to the market

A

Beta = 0

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9
Q

Beta = 1

A

value fluctuates with the market directly

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10
Q

value fluctuates with the market directly

A

Beta = 1

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11
Q

Beta > 1

A

value is very sensitive to the market changes

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12
Q

value is very sensitive to the market changes

A

Beta > 1

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13
Q

Insight of CAPM

A
  1. ) Investments return at least risk-free rate
  2. ) Equity Invest should have higher rate of return
  3. ) Beta represent risk that cannot be diversified away
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14
Q
  1. ) Investments return at least risk-free rate
  2. ) Equity Invest should have higher rate of return
  3. ) Beta represent risk that cannot be diversified away
A

Insight of CAPM

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15
Q

Risk-Diversification

A

spreading out investments to overall reduce risk

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16
Q

spreading out investments to overall reduce risk

A

Risk-Diversification

17
Q

Capital Budgeting

A

Making long-term financial decisions

18
Q

Making long-term financial decisions

A

Capital Budgeting

19
Q

Capital

A

Financing obtained by a business in order to buy assets it needs

20
Q

Financing obtained by a business in order to buy assets it needs

A

Capital

21
Q

Budgeting

A

Numerical Financial Planning

22
Q

Numerical Financial Planning

A

Budgeting

23
Q

Hedge Fund

A

Sophisticated mathematical models with rapid trading strategy, usually investors with a lot of money invest in it

24
Q

Sophisticated mathematical models with rapid trading strategy, usually investors with a lot of money invest in it

A

Hedge Fund

25
Q

Private Equity Fund

A

Investments in company not publicly traded, usually for large investments and hard to get in or out of

26
Q

Investments in company not publicly traded, usually for large investments and hard to get in or out of

A

Private Equity Fund

27
Q

Managed Fund

A

Analyst’s research and strategy with higher management fee

28
Q

Analyst’s research and strategy with higher management fee

A

Managed Fund

29
Q

Index Fund

A

Using simple mathematical rules with low management fees usually for long term investments

30
Q

Using simple mathematical rules with low management fees usually for long term investments

A

Index Fund

Financial Analysis (4 decks)

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