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All posts by Bill Campbell III, CFA

If you haven’t read the article on option strategies in general, that’s a good place to start, then return here.  In particular, if you haven’t read the warning about calculating profit that appears at the end of that article, you should go read it now; the way I’m calculating the profit here is correct, but […]

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CFA® Level II Derivatives Membership, CFA® Level II Membership, CFA® Level III Membership, CFA® Level III Derivatives Membership

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If you haven’t read the article on option strategies in general, that’s a good place to start, then return here.  In particular, if you haven’t read the warning about calculating profit that appears at the end of that article, you should go read it now; the way I’m calculating the profit here is correct, but […]

This article is for members only.  You can become a member now by purchasing a

CFA® Level II Derivatives Membership, CFA® Level II Membership, CFA® Level III Membership, CFA® Level III Derivatives Membership

This will give you access to this and all other articles at that membership level.

If you haven’t read the article on option strategies in general, that’s a good place to start, then return here.  In particular, if you haven’t read the warning about calculating profit that appears at the end of that article, you should go read it now; the way I’m calculating the profit here is correct, but […]

This article is for members only.  You can become a member now by purchasing a

CFA® Level III Membership, CFA® Level III Derivatives Membership

This will give you access to this and all other articles at that membership level.

The reading on currency management briefly mentions seagull spreads, and suggests that there are two types: long seagull spreads and short seagull spreads.  Apart from the fact that there are actually four types of seagull spreads (I’ll get to them in a moment), the biggest problem is that they never show a payoff diagram for […]

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CFA® Level III Membership, CFA® Level III Derivatives Membership

This will give you access to this and all other articles at that membership level.

By breakeven analysis we mean a determination of whether or not a firm can earn a positive (or zero) profit given its demand curve and its cost structure.  By shutdown analysis we me a determination of whether or not a firm should continue to operate in the short run and in the long run given […]

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CFA® Level I Economics Membership, CFA® Level I Membership

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This will be a short article, mercifully. Accounting profit is the difference between accounting revenue and accounting cost, while economic profit is the difference between economic revenue and economic cost.  (I know: not very exciting.  Hang in there; it gets better.) Accounting revenue and economic revenue are the same: total revenue.  The amount you receive […]

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CFA® Level I Economics Membership, CFA® Level I Membership

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Let’s get the terminology out of the way first. “Marginal” means “for the next unit”.  Thus: Marginal Revenue: The increase in revenue (sales) from producing and selling one additional unit of whatever it is you’re producing and selling Marginal Cost: The increase in cost (expenses) from producing and selling one additional unit of whatever it […]

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CFA® Level I Economics Membership, CFA® Level I Membership

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This article contains a number of supply and demand graphs.  Before reading it, I encourage you to look at this short article I wrote on these graphs, so that you don’t risk suffering irreparable trauma when you see them. The idea of elasticity is fairly simple, yet it can be baffling to many candidates (primarily […]

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CFA® Level I Economics Membership, CFA® Level I Membership

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This is a very short article, but one that you should read before reading any other article that deals with supply and demand. In a nutshell, economists’ supply and demand graphs – price vs. quantity – are weird.  (By “weird” I mean “stupid”.)  For whatever reason, some economist a bazillion years ago decided that these […]

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CFA® Level I Economics Membership, CFA® Level I Membership

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Markets are interlinked.  There are strong correlations between prices in equity markets, fixed income markets, commodity markets, real estate markets, and so on.  (It’s too much to say, for example, that stock prices are affected by bond prices – which is how the curriculum states it – which imputes a cause-and-effect relationship when the correlation […]

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CFA® Level I Quantitative Methods Membership, CFA® Level I Membership

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