This is a contract on interest rates. Long wins when interest rate increases, loses when interest rate decreases.
What is a FRA (forward rate agreement)
100
It's short form is PPP. Please no "LOLing", we are all grown ups.
What is Purchasing Power Parity
100
You get this ratio by dividing current assets by current liabilities.
What is Current Ratio
100
This is the amount borrower promises to pay on or before maturity date of the issue.
What is Par/Face/Stated value.
200
Required returns always include this free rate.
What is Risk Free Rate
200
This type of Option Pricing Model calculates expected option value using two types of payoffs using probabilities at each outcome.
What is a Binomial OPM.
200
It's a change in consumer price index over a given period of time.
What is Inflation
200
It's measured by dividing gross profit by revenue.
What is Gross Profit Margin
200
These type of "no interest" bonds are sold at a deep discount from their par value.
What is zero coupon bonds.
300
Investors demand a risk _______ for the all uncertainty associated with investments. Opposite of a discount.
What is a risk Premium
300
This unit measures a change in value of an option for a one unit change in stock price. Also a popular airline.
What is Delta
300
One of three types of un-employments. Paying attention in this training will prevent you from joining atleast one of the three.
What is Frictional, Cyclical and Structural.
300
Interest coverage is measured by dividing EBIT with ______
What is Interest
300
Daily Double!!
What is Reinvestment Risk
In this type of risk, bond investors are forced to reinvest at lower yields if interest risk decline. Hint: The risk is already stated in the answer.
400
This is the most basic model used to measure expected return on an equity - it includes a risk free rate, market return and a slope. In short, its also "something you wear a to a baseball game" model.
What is CAPM (Capital Asset Pricing Model)
400
In order to make the value of the swap _____ for both parties, PV of floating rate payment is equal to present value of fixed rate payment.
What is zero
400
If you use Fiscal Policy, than you better have this Policy.
What is Monetary.
400
This ration indicates a company's ability to pay its short term liabilities.
What is Liquidity Ratio
400
This bond pays variable interest rate.
What is a floating rate bond.
500
Total Risk equals systematic (market risk) and this type of "company specific" risk.
What is Unsystematic
500
Credit Default Swaps are used to hedge against one of these three types of credit risk.
What is Default Risk, Credit Spread Risk or Downgrade Risk.
500
Daily Double!!
What is Classical, Keynesian or Monetarist.
Answer: One of three types of macroeconomic thoughts.
500
If you have preferred equity, EPS equals net income minus _____ divided by common shares outstanding.
What is preferred dividends or interest.
500
Current yield is calculated by dividing annual coupon payment by ___________.