About some of the formulas in Finance that you need to memorize for the moment.
Exam Prep Portfolio consist of understanding, memorizing and speed, and you need to balance all these 3 parameters as each one will help you minimize your risk and maximize output. My personal weights used are: understanding & research = 50%, speed is 15%, and memory is 35%. But I have observed that in my class people who are getting higher marks than me have a portfolio (my guess) of 70% memory, 20% speed and 10% understanding.
It has been my attempt to keep things in the most logical and common sensesical way. But there are somethings which requires a lot of research which time doesn't allow. In the later stage you can understand these formulas but for now you need to memorize them.
Other areas that need to be memorized include:
Corporate Finance (like Corporate Governance which is theoretical)
From the experience of students who are giving the exam, accuracy is the most important thing, but the questions are also predictable especially of equity.
Conclusion: You need the very right balance in your approach, depending on time resources, energy and partners, you must dedicate time in understanding and memorizing.
Exam Prep Portfolio consist of understanding, memorizing and speed, and you need to balance all these 3 parameters as each one will help you minimize your risk and maximize output. My personal weights used are: understanding & research = 50%, speed is 15%, and memory is 35%. But I have observed that in my class people who are getting higher marks than me have a portfolio (my guess) of 70% memory, 20% speed and 10% understanding.
It has been my attempt to keep things in the most logical and common sensesical way. But there are somethings which requires a lot of research which time doesn't allow. In the later stage you can understand these formulas but for now you need to memorize them.
Other areas that need to be memorized include:
- Beta is sensitivity of asset with respect to market. It can be also looked upon as Cov-im/sigma-square-m. beta= Pim (sigma-i/sigma-m)
- M-squared is like sharpe ratio (rp2-rf)(sigma-m/sigma-p2)-(rm-rf), (Trenoy measure, Jensen alpha both are for SML excess and slope): Details about these 3 measures, probably they will come in some later stage with more detailed derivations on my Portfolio thread.
- Different yield formulas of quant where hpy =(bdy*n/360)/(1-bdy*n/360) , CFO shortcuts (increase in asset means reduced cash flows)
- Cash convergence cycle in corporate finance, and its derivation
- Technical Analysis from core readings
- Enron and Sunbeam Scandal
- Sale type lease vs other types
- Difference in USGAP vs IFRS example in held for sale/ for trade/ till maturity
- Cost of trade credit numerical
- HHI and other methods to compute monopoly in economics; sum of squared % of market share of top 50 firm. 10,000 for monopoly, above 1800 indicate market is not competitive (HHI).......
- 4 firm ratio of over 60 depicts oligopoly
- Money supply * velocity = price level * real output; money multiplier = (1+c)/(c+d)
- Days of sale outstanding = 365 / receivable turnover ...... Inventory in-hand = 365 / inventory turnover ..... Number of days payable = 365 / payable turnover ratio
- Equity Minority interest, current assets placement in USGAP VS IFRS
- DOL = % change in EBIT / % change in sales ; DFL = % change in EPS / % change in EBIT
- DOL = (S - TVC)/(S-TVC-F)
- DFL = (EBIT/(EBIT-Intrest))
- Impairment of inventory in USGAP (lower of NPV, historical, replaceable)... CV > UFCF ? long lived assets?
- Derivative formula for forward rate agreement. i.e. formula to long the settlement for the notional amount
- NI ---> CFO (indirect conversion)
- Cost of trade credit = {1 + PD/(1-PD)}^[365/DAYS post discount]
- BEQ into BDY (RMM = (360* RBD)/(360 - (t* RBD) ) this has been imp
- HPY as a function of Bdy
- ebit=operating income
- Interest burden = EBI/EBIT; used in DuP (FRA)
- Operating cycle vs Cash convergence cycle (Corporate Fin)
- 9 major sections of GIPS
- Target FFR= 2% + actual inflation + 0.5(actual inflation - 2%)+ 0.5(output gap)
- beta in terms of sd of market and port (portfolio management)
- Margin for equity(maintained margin) vs future (replenish)
- Renewable source economy demand elastics or inelastic?
- Eco elasticities (0-1, greater than 1)
- hypothesis of paired tests, chia quare, others complex ones
- Tax loss carry forward, details about loss carry forward
- Do comparative advantage questions in economics
- Quality of earning ans scandals
- different type of markets: again
- types of data: time series, longitudinal, cross sectional
- long question of cash convergence cycle
- long quest of equity 2 methods, p/e forward done by the person in the class
- maintenance variation initial
- step-up inverse floater inflation
- types of unemployment
- Still dof doo leverages giving problems
- fundamental weighting techniques
- Embryonic, mature, shakeout, phases in equity
- price to earning ratio = dividend payut ratio/ (req ROE rate - growth rate)
- net income for common or both in diluted earning questions
- breaking points and operating break even point
- financial leverage, fin multiplier, d/e,
- hpy to rmm, rmm to bdy
- rm to bdy formula 360rb/ (360-trb)
- Escalation bias, confirmation bias different bias in cfa
- Classical Keynesian and Monetarists
- Pension list of all elements
- technical analysis of all element
- hypothesis entire revision
- percentage of completion and all methods of revenue collection
- what to do about loss in held till maturity, does it comes in OCI
- money weighted is irr, time weighted returns in quant
- ordinal interval nominal
- minute details about proxy statement
- ifrs usgap differences
- sale type lease vs operating lease vs direct financing lease
Corporate Finance (like Corporate Governance which is theoretical)
From the experience of students who are giving the exam, accuracy is the most important thing, but the questions are also predictable especially of equity.
Conclusion: You need the very right balance in your approach, depending on time resources, energy and partners, you must dedicate time in understanding and memorizing.
