General Finance
How do you time the market?
You can't... consistently.
What are the 3 financial statements?
Income Statement, Balance Sheet, Cash Flow Statement
What is the accounting formula
Assets = Equity + Liabilities
What has been the FEDS most recent decision concerning interest rates.
BONUS (+100) When is the FEDS next meeting?
Hold Rates Steady (BPS March 2025)
BONUS: May 6-7 or potential emergency meeting soon
Which of these is not on the NYSE?
Chipotle, Cava, Cluckin Bell, McDonalds
Cluckin Bell
Which stock performed the best in 2024?
BONUS (+100): What was its return? (+-40%)
*If you get the bonus wrong you must do 10 pushups
Palantir (Up 340%)
Which of these is not a real market classification?
Bull, Eagle, Bear
Eagle
What are 3 major line items on each of the financial statements?
Income Statement: Revenue; Cost of Goods Sold; SG&A (Selling, General & Administrative Expenses); Operating Income; Pretax Income; Net Income
Balance Sheet: Cash; Accounts Receivable; Inventory; Plants, Property & Equipment (PP&E); Accounts Payable; Accrued Expenses; Debt; Shareholders’ Equity.
Cash Flow: Net Income; Depreciation & Amortization; Stock-Based Compensation; Changes in Operating Assets & Liabilities; Cash Flow From Operations; Capital Expenditures; Cash Flow From Investing; Sale/Purchase of Securities; Dividends Issued; Cash Flow From Financing; Total Cash Flow, Cash at end of the year
Name one country that wasn't hit with reciprocal tariffs
Russia, North Korea, Belarus, Cuba, Burkina Faso, Palau, Seychelles, Somalia, Canada/Mexico (impacted by different tariffs), Vatican City, Somalia, Seychelles, Palau
Which of these is not a real investment bank?
Deutsche Bank, Lazard, NoCap Capital, RBC Capital
NoCap Capital
What is the time value of money?
The time value of money is a financial principle that states the value of a dollar today is worth more than the value of a dollar in the future.
What is a DCF?
Discounted cash flow (DCF) is a valuation method that estimates the value of an investment using its expected future cash flows
What is the phrase used for terms in accounting that don't abide by the conventional reporting standards used in businesses?
What is an example of one?
Non-GAAP
Anything that has (excluding, adjusted)
Free Cash Flow
EBITDA, EBIT
Net income (with adjustments)
What is the current Federal Funds Rate Range? (+-.05%)
What does ROI measure and how do you calculate it
ROI measures the return of an investment by comparing gains/losses to the cost basis.
The formula: (profit-cost)/cost or net income/cost
What is the CAPM formula and what does it calculate?
a financial model that calculates the expected rate of return for an asset or investment. (based on its systematic risk)
CAPM = Rf * Beta ( Rm-Rf )
How do bonds and interest rates work in relation to each other?
Bond prices and interest rates have an inverse relationship. When interest rates rise, newly issued bonds offer higher yields, making existing lower-yielding bonds less attractive, which decreases their prices.
Name the top 2 largest market cap stocks
Microsoft and Apple
How often does CPI Data come out? What does CPI measure?
Monthly
It measures inflation through increases in day-to-day expenses. (basket of G&S)
What is the average annual return of the S&P500
BONUS (+200):What is the investment strategy where you invest fixed amounts of money into the market at recurring intervals ?
The S&P500 returns about 10% annually on average
Dollar Cost Averaging (Relevant Right Now)
How do you calculate WACC? What is it used for?
Cost of Equity * (% Equity) + Cost of Debt * (% Debt) * (1 – Tax Rate) + Cost of Preferred * (% Preferred).
Used as the discount rate for valuing a company or its investment oppportunities.
Weight of Equity * Cost of Equity + Weight of debt * Cost of debt * (1-tax)
What happens in each statement when Inventory goes up by $10, assuming you pay for it with cash?
No changes to the Income Statement.
Cash Flow from operations -10, (and net change in cash)
Balance Sheet: Inventory +10, Cash -10
On the Cash Flow Statement, Inventory is an asset so that decreases your Cash Flow from Operations – it goes down by $10, as does the Net Change in Cash at the bottom. On the Balance Sheet under Assets, Inventory is up by $10 but Cash is down by $10, so the changes cancel out and Assets still equals Liabilities & Shareholders’ Equity.
What’s the formula for Enterprise Value?
Equity Value + Net Debt (Easy)
What represents the risk-free rate and why? What is it now? (+-.05%)
the 3 month T bill and around 4.273%.
The three-month U.S. Treasury bill is a useful proxy for RFR because the market considers there to be virtually no chance of the U.S. government defaulting on its obligations.
What are 4 of the Financial Markets?
Stocks Market
Bond Market
Money Market
Forex Market
Derivative Market
Commodities Markets
Cryptocurrency Markets