Financial Exam Help 123

Month: September 2013

  • Level I – Economics

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    Bill Campbell
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    Here are some articles on Level I Economics.  If you’d like to see more articles on Level I Econ, just ask. [menu name = “Level I Economics Articles”]

  • Level I – Quantitative Methods

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    Bill Campbell
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    Here are some articles on Level I Quantitative Methods.  If you’d like to see more articles on Level I Quant, just ask. [menu name = “Level I Quantitative Methods Articles”]

  • Level I – Ethics

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    Bill Campbell
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    Here are some articles on Level I Ethics.  If you’d like to see more articles on Level I Ethics, just ask. [menu name = “Level I Ethics Articles”]

  • Level I – General

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    Bill Campbell
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    Here are some articles on the Level I exam in general.  If you’d like to see more general articles on the Level I exam (e.g., test-taking strategy), just ask. [menu name = “Level I General Articles”]

  • CAL vs. CML vs. SML

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    Bill Campbell
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    The Capital Allocation Line (CAL), Capital Market Line (CML), and Security Market Line (SML) can be confused easily, and for good reason: the graphs look virtually identical, the assumptions under which they are constructed are essentially the same, and their implications are similar.  We’ll characterize each one and try to eliminate the confusion. The assumptions…

  • Par Curve, Spot Curve, and Forward Curve

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    Bill Campbell
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    When you hear someone talk about “the yield curve”, they usually mean the par yield curve (and, more specifically, the par yield curve for risk-free bonds (e.g., the U.S. Treasury par curve)), but there are occasions when they might mean the spot yield curve or the forward yield curve.  We’ll go through a description of…

  • Earnings per Share (EPS)

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    Bill Campbell
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    Calculating earnings per share (EPS) is relatively straightforward: calculate earnings (available to common shareholders), then divide it by the weighted-average number of shares of common stock outstanding (WACSO).  However, there are possibly two EPS calculations that you need to show on an income statement: basic EPS and fully diluted EPS: Basic EPS uses the existing…

  • Weighted Average Common Shares Outstanding (WACSO)

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    Bill Campbell
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    One key to computing earnings per share (EPS) is computing the number of shares of common stock to use in the denominator; we call this number the weighted average common shares outstanding (WACSO).  There are two ways to calculate WACSO; I’ll cover both. There are several transactions than can change the number of shares of…

  • Put-Call Parity

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    Bill Campbell
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    Put-call parity is nothing more than an equation that shows how the price of a (European) put option (on, say, a stock) relates to the price of a (European) call option (on the same stock).  The equation arises from a simple finance fact: If, given any set of circumstances, portfolio A and portfolio B have…