Download Review Sheet for Fin 430 Exam 1

Review Sheet for Fin 430 Exam 1
Although the below list reflects the large majority of the material on the test; there may be a few questions that appear
on the exam and are not directly stated below. Good luck with your studies.
Article entitled: Financial Physicians
Chapter 1: Introduction to Investments
Basic time Value of money calculations
Define stocks, bonds and understand their risk return relationship
Define a defined benefit and defined contribution plan
Define a CFA, CFP and churning
All HW problems and class notes
Chapter 9: Business Environment
Define macroeconomics and microeconomics
According to the author what are the major forces impacting the economy
What are the key variables that should be cited in an economic analysis?
Discuss a SWOT analysis
Discuss the business cycle
Discuss key leading economic indicators
Define the SIC and NAICS system
Discuss Michael Porter’s five forces
Define an oligopoly
Discuss corporate governance, the agency problem and monitoring
All HW and class notes
Chapter 10: Financial Statement Analysis
Be able to construct a basic income statement, and balance sheet
Be able to define the three categories in a statement of cash flow
Be able to define basic and diluted EPS
Be able to calculate and interpret the following ratios: ROE, ROA, PM, Dupont identity, receivables
turnover, inventory turnover, asset turnover, equity multiple, D/E, Total debt ratio, current ratio, quick ratio,
and interest coverage.
Be able to discuss and use the P/E, P/B and dividend yield ratios
Be able to calculate EVA
All HW and class notes
Chapter 11: Value Stock Investing
Be able to define, value, growth and contrarian investing
Be able to use the CAPM to calculate the required return
Be able to use the constant growth model
Be able to use the multi-stage growth model
Be able to use the P/E model
Be able to discuss the Graham and Dodd approach
Be able to discuss Warrant Buffett’s approach
Be able to discuss the criteria for value stocks
Be able to discuss and use the value of ROE (ROE divided by P/E)
All HW and class notes
Chapter 12: Growth stock investing
What are fertile grounds for growth stocks?
What are pitfalls for growth?
Be able to calculate and use the PEG ratio
Be able to use equation 12.7: The forward P/E ratio stated in terms of k, ROE and b
Be able to use and discuss the cash flow model
Be able to discuss the representativeness bias and financial analyst bias
All HW and class notes
Chapter 7: Market Anomalies
Be able to define the three forms of the efficient market hypothesis
Be able to discuss the joint hypothesis problem
Be able to discuss the fundamental anomalies
Be able to discuss the calendar anomalies
Be able to calculate the market model abnormal return
Be able to define, record date, announcement date, pay date, ex-split date and split ratio
All HW and class notes