Financial Theory FAQs

  1. What investments have been the poorest historical performers?

  2. What are risks associated with investing in the oil & gas drilling sector?

  3. What does the efficient market hypothesis assume about fair value?

  4. What types of investors are best-suited for stop loss orders?

  5. How do I use the CAPM (capital asset pricing model) to determine the cost of equity?

  6. What math skills do I need to study microeconomics?

  7. Why do high profiting sales mitigate credit risk?

  8. What kinds of topics does microeconomics cover?

  9. How does the "Buffett Premium" increase Berkshire Hathaway's stock price?

  10. How do you calculate the ratio between debt and equity in the cost of capital

  11. How does quantitative easing in the U.S. affect the stock market?

  12. Which countries are most productive in terms of GDP?

  13. How do you calculate costs of capital when budgeting new projects?

  14. How does a nation transition from a socialist economy to a free market economy

  15. What is cash or pro forma income on an income statement?

  16. What are the risks involved in OTC (over-the-counter) trading?

  17. How should young people invest in a bear market?

  18. What is the difference between the cost of capital and required return?

  19. What is the difference between yield to maturity and the spot rate?

  20. Why was the practice of depreciating assets for accounting purposes created?

  21. How do companies measure labor supply in human resources planning?

  22. Why are OTC (over-the-counter) transactions controversial?

  23. What is the difference between cost of equity and cost of capital?

  24. What is arbitrage pricing theory?

  25. What does a high weighted average cost of capital (WACC) signify?

  26. How do economists and psychologists calculate diminishing marginal utility differently?

  27. What does the law of diminishing marginal utility explain?

  28. How can retirees protect their wealth in a bear market?

  29. How does the invisible hand phenomenon affect investment markets?

  30. What is the affect of the invisible hand on consumers?

  31. What are some examples of economies of scale?

  32. How can quantitative easing be effective in the economy?

  33. What is the advantage of using the relative strength index (RSI)?

  34. What's the difference between r-squared and correlation?

  35. What are the most common issues with Serial Correlation in stocks?

  36. How do I calculate yield to maturity of a zero coupon bond?

  37. What does the term 'invisible hand' refer to in the economy?

  38. At what level is the current account deficit considered excessive, in terms of percent?

  39. What is the difference between yield and rate of return?

  40. What is the difference between a Sharpe ratio and a Sortino ratio

  41. How do you the calculate Sharpe ratio in Excel?

  42. What is a good Sharpe ratio?

  43. What are the risks associated with investing in telecommunication stocks

  44. How are corrective waves created?

  45. What does a mutual fund's beta coefficient measure?

  46. How do I judge a mutual fund's performance?

  47. What are the main differences between a systematic investment plan (SIP) and mutual ...

  48. What are the benefits and costs (or risks) of a systematic investment plan (SIP)?

  49. What are the differences between a systematic investment plan (SIP) and a recurring ...

  50. How can I protect my portfolio from market corrections?

  51. What's the difference between alpha and beta?

  52. What's the difference between a 401(k) and a pension plan?

  53. What is the difference between arbitrage and speculation?

  54. What are the main risks of after-hours trading?

  55. What is the difference between positive and normative economics?

  56. What is finance?

  57. How does a company switch from one stock exchange to another?

  58. How can I use layaway plans for budgeting?

  59. How do open market operations affect the U.S. money supply?

  60. According to the CAPM, the expected return on a stock, that is part of a portfolio, ...

  61. A formula timing plan which consists of periodic purchases of a fixed dollar amount ...

  62. How do I know when to "rebalance" my investments?

  63. Why is Game Theory useful in business?

  64. What's the difference between consumer confidence and consumer sentiment?

  65. What is the difference between systemic risk and systematic risk?

  66. What does it mean when futures prices are in contango?

  67. Do speculators have a destabilizing effect on the financial system?

  68. What is a permanent portfolio?

  69. Does the balance sheet always balance?

  70. The conduit theory...

  71. What is moral hazard?

  72. Which statement(s) is/are FALSE about market risk?

  73. Which statement is FALSE about a prospectus issued under the Securities Act of 1933?

  74. What currency is affected by the interest rate decisions of the Bank of England (BoE)?

  75. Do noise traders have any long-term effect on stock prices?

  76. What is an efficient market and how does it affect individual investors?

  77. What is the "random walk theory" and what does it mean for investors?

Trading Center