Financial Theory FAQs

  1. What is the utility function and how is it calculated?

  2. What asset allocation should I use for my retirement portfolio?

  3. What types of assets produce negative portfolio variance?

  4. How does the risk of investing in the industrial sector compare to the broader market?

  5. What risks do I face when investing in the insurance sector?

  6. What are the main factors that impact share prices in the insurance sector?

  7. How does the risk of investing in the retail sector compare to the broader market?

  8. What are the main risks associated with trading derivatives?

  9. Why are high yield bonds typically lower rated bonds?

  10. How safe are high yield bonds?

  11. How does the risk of investing in the utilities sector compare to the broader market?

  12. How can I use a regression to see the correlation between prices and interest rates?

  13. Why would a company use a form of long-term debt to capitalize operations versus ...

  14. How can I use expected return with my risk profile to make an investment decision?

  15. Over what period should I use dollar cost averaging?

  16. How have portfolios from within the efficient frontier performed historically?

  17. For what investments is dollar cost averaging most effective?

  18. What are the advantages of portfolio planning with the efficient frontier?

  19. What does the information ratio tell about the design of a mutual fund?

  20. How is the expected market return determined when calculating market risk premium?

  21. How can I use risk return tradeoff to determine my risk tolerance and investment ...

  22. How do I calculate a modified duration using Matlab?

  23. How do I calculate the rule of 72 using Matlab?

  24. How do I calculate the standard error using Matlab?

  25. How do I adjust the rule of 72 for higher accuracy?

  26. What is the minimum number of simulations that should be run in Monte Carlo Value ...

  27. How are junk bonds rated differently by Standard & Poor's and Moody's?

  28. What is the difference between managerial accounting and financial accounting?

  29. Why is risk return tradeoff important in designing a portfolio?

  30. How does discretionary income relate to autonomous consumption?

  31. How historically valid is the 80-20 rule?

  32. What are the primary risks an investor should consider when investing in the food ...

  33. Why are financial markets considered to be transparent?

  34. How can I run linear regressions in MATLAB?

  35. How can I calculate convexity in MATLAB?

  36. How does the risk of investing in the food and beverage sector compare to the broader ...

  37. How is game theory related to the Nash equilibrium?

  38. How can I use systematic sampling with stratified sampling?

  39. Who developed Critical Path analysis in operations management?

  40. What is the difference between linear regression and multiple regression?

  41. Why is a bank guarantee important in a long-term project contract?

  42. What are some examples of applications of the geometric mean?

  43. How reliable is the mean variance analysis of an investment?

  44. How do I calculate my year-to-date (YTD) return on my portfolio?

  45. Can a mean variance analysis be done for any investment?

  46. What does Value at Risk (VaR) have to do with maximization of shareholder wealth?

  47. How do you calculate the excess return of an ETF or indexed mutual fund?

  48. Which segment of the oil and gas sector is most vulnerable if oil prices drop?

  49. What is the difference between the cost of capital and the discount rate?

  50. What can cause a security to go from investment grade to "junk" grade?

  51. How does the market share of a few companies affect the Herfindahl-Hirschman Index ...

  52. What does the rule of 70 indicate about a country's future economic growth?

  53. How is the rule of 70 related to the growth rate of a variable?

  54. What are the benefits of using ceteris paribus assumptions in economics?

  55. How do investment advisors calculate how much diversification their portfolios need?

  56. What are some of the uses of the coefficient of variation (COV)?

  57. Why is the insurance sector considered a low-risk investment?

  58. What is the difference between the rule of 70 and the rule of 72?

  59. Why should investors care about risk weighted assets of a bank?

  60. What is the breakdown of subjects covered on the Series 6 exam?

  61. What are some classes I can take to prepare for the Series 6 exam?

  62. What is the risk return tradeoff for bonds?

  63. What is the formula for calculating the capital to risk weight assets ratio for a ...

  64. What option strategies can I use to earn additional income when investing in the ...

  65. How do I calculate how long it takes an investment to double (AKA 'The Rule of 72') ...

  66. How valuable is the forward rate as an overall economic indicator?

  67. Under what circumstances might a company decide to do a hostile takeover?

  68. How does the equity risk premium correlate with the Federal Reserve's prime rate?

  69. How do I calculate the equity risk premium in Excel?

  70. Should I invest in penny stocks or large cap stocks for my retirement portfolio?

  71. How can I manage the three possible sources of business risk?

  72. What risk factors should investors consider before purchasing a callable bond?

  73. What metrics should I use to evaluate the risk return tradeoff for a mutual fund?

  74. What are the main differences between a mixed economic system and pure capitalism?

  75. Did the repeal of the Glass-Steagall Act contribute to the 2008 financial crisis?

  76. What are some examples of risks associated with financial markets?

  77. What is a good annual return for a mutual fund?

  78. How can the problem of asymmetric information be overcome?

  79. What does a high equity risk premium signify about a company's stock future?

  80. How can companies reduce internal and external business risk?

  81. What is Z-spread and option adjusted credit spread?

  82. What are common use cases for marginal analysis?

  83. What is a Z bond in a collateralized mortgage obligation (CMO)?

  84. How were the figures 80 and 20 arrived at in the 80-20 rule (Pareto Principle)?

  85. Are short-term investments a good strategy for cash-rich small businesses"?

  86. Can you accidentally engage in insider trading?

  87. What is a geometric mean in statistics?

  88. What are some real-life examples of the economies of scope?

  89. How reliable or accurate is marginal analysis?

  90. How is the 80-20 rule (Pareto Principle) used in management?

  91. Why does the efficient market hypothesis state that technical analysis is bunk?

  92. What is the difference between speculation and gambling?

  93. How do you use a financial calculator to determine present value?

  94. How accurate is the equity risk premium in evaluating a stock?

  95. What are the most effective ways to reduce moral hazard?

  96. How does the risk of investing in the electronics sector compare to the broader market?

  97. How do markets account for systematic risk?

  98. What is the theory of asymmetric information in economics?

  99. How does market risk differ from specific risk?

  100. How is perpetuity used in the Dividend Discount Model?

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