
Getting Started  Mathematics Required For The Examination
Mathematics Required For The Examination
Math on the Series 3 entails nothing more than addition, subtraction, multiplication and division. One does, however, need to read word problems carefully in order to understand which operations are required to arrive at a solution and why.
For example, say you had to compute an initial margin that is 25% higher than the maintenance margin. You are told that the maintenance margin is $500. You would need to multiply $500 times 1.25 (that means knowing that 25% is the same as 0.25, and that you have to add 1 to that to account for the $500 starting point) to arrive at $625.
To compute profits or losses from trades, you'll have to multiply the number of contracts by the number of units per contract by the price per unit. We will spend a great deal of time on this in Chapter 11: Test Taking.
You will also need to understand numerical concepts that may appear at first blush counterintuitive. For example, if the basis โ an important concept from Chapter 6: Hedging โ goes from 6 cents to 3 cents, you need to know that it is going up rather than down.
Lastly, you will need to understand ratios. They are nothing more than division. But you may well be asked to compute the return on equity if your trade earned $100 gross profit on an investment of $25. If you answered "$4," that's incorrect. First of all, the answer will be a percentage, not a dollar figure. Secondly, you have to subtract that $25 investment out of the $100 profit to make a fair comparison. The formula, then, is ($100$25)/$25. (This also presupposes that you know to perform the function in the parentheses before moving on.) So we come up with $75/$25, which can be expressed as 3, but is more correctly written as 300%, when asked for a return on equity figure.

Economics
4 Countries Pleading for Higher Commodity Prices
Discover what countries are struggling the most from the price collapse in commodities and what these countries require to return to economic growth. 
Stock Analysis
Glencore Vs. Noble Group
Read about the differences between Glencore and Noble Group, two companies in the commodities business. Learn about accounting accusations facing Noble Group. 
Chart Advisor
Watch This ETF For Signs Of A Reversal (BCX)
Trying to determine if the commodity markets are ready for a bounce? Take a look at the analysis of this ETF to find out if now is the time to buy. 
Investing Basics
The Importance of Commodity Pricing in Understanding Inflation
Commodity prices are believed to be a leading indicator of inflation, but does it always hold? 
Options & Futures
What Does Quadruple Witching Mean?
In a financial context, quadruple witching refers to the day on which contracts for stock index futures, index options, and single stock futures expire. 
Options & Futures
4 Equity Derivatives And How They Work
Equity derivatives offer retail investors opportunities to benefit from an underlying security without owning the security itself. 
Fundamental Analysis
Performance Review: Commodities in 2015
Learn how commodities took a big hit in 2015 with a huge variance in performances. Discover how the major commodities performed over the year. 
Stock Analysis
The Biggest Risks of Investing in SandRidge Stock
Learn about the significant risks of investing in SandRidge. Read how the company may not be able to service its substantial debt load. 
Options & Futures
Five Advantages of Futures Over Options
Futures have a number of advantages over options such as fixed upfront trading costs, lack of time decay and liquidity. 
Chart Advisor
These 3 ETFs Suggest Commodities Are Headed Lower (COMT,CCX,DBC)
The charts of these three exchange traded funds suggest that commodities are stuck in a downtrend and it doesn't look like it will reverse any time soon.

Nonrenewable Resource
A resource of economic value that cannot be readily replaced ... 
Warrant
A derivative that confers the right, but not the obligation, ... 
Swap
A derivative contract through which two parties exchange financial ... 
Hedge
Making an investment to reduce the risk of adverse price movements ... 
Convergence
The movement of the price of a futures contract towards the spot ... 
Crude Oil
Crude oil is a naturally occurring, unrefined petroleum product ...

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