Financial Theory FAQs

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

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

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

  4. What is arbitrage pricing theory?

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

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

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

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

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

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

  11. What are some examples of economies of scale?

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

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

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

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

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

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

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

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

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

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

  22. What is a good Sharpe ratio?

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

  24. How are corrective waves created?

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

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

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

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

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

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

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

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

  33. What is the difference between arbitrage and speculation?

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

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

  36. What is finance?

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

  38. How can I use layaway plans for budgeting?

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

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

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

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

  43. Why is Game Theory useful in business?

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

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

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

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

  48. What is a permanent portfolio?

  49. Does the balance sheet always balance?

  50. The conduit theory...

  51. What is moral hazard?

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

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

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

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

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

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

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