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Contents 1 Study Session 2 1.1 5. Time Value of Money 1.1.1 a. real risk-free rate, inflation, premiums 1.1.2 b. EAR 1.1.3 c. FV, PV, annuity, perpetuity, annuity due, uneven cash flows 1.1.4 d. time line, time index, TVM applications (mortgages, retirement) 1.2 6. Discounted Cash Flow Applications 1.2.1 a. Calculate NPV, IRR 1.2.2 b. Holding period return (HPR, total return) 1.2.3 c. 1.2.4 d. 1.3 7. Statistical Concepts and Market Returns 1.3.1 a. 1.3.2 b. 1.3.3 c. 1.3.4 d. 1.3.5 e. 1.3.6 f. 1.3.7 g. 1.3.8 h. 1.3.9 i. 1.3.10 j. 1.4 8. Probability Concepts 1.4.1 a. 1.4.2 b. 1.4.3 c. 1.4.4 d. 1.4.5 e. 1.4.6 f. 1.4.7 g. 1.4.8 h. 1.4.9 i. 1.4.10 j. 1.4.11 k. 1.4.12 l. 1.4.13 m. 1.4.14 n. 2 Study Session 3 2.1 9. Common Probability Distributions 2.1.1 a. 2.1.2 b. 2.1.3 c. 2.1.4 d. 2.1.5 e. 2.1.6 f. 2.1.7 g. 2.1.8 h. 2.1.9 i. 2.1.10 j. 2.1.11 k. 2.1.12 l. 2.2 10. Sampling and Estimation 2.2.1 a. 2.2.2 b. 2.2.3 c. 2.2.4 d. 2.2.5 e. 2.2.6 f. 2.2.7 g. 2.2.8 h. 2.2.9 i. 2.2.10 j. 2.2.11 k. 2.3 11. Hypothesis Testing 2.3.1 a. Define Hypothesis 2.3.1.1 Steps of hypothesis testing 2.3.1.2 Null hypothesis 2.3.1.3 Alternative hypothesis 2.3.1.4 One-Tailed, Two-Tailed test of hypothesis 2.3.2 b. 2.3.3 c. 2.3.4 d. 2.3.5 e. 2.3.6 f. 2.4 12. Correlation and Regression 2.4.1 a. 2.4.2 b. 2.4.3 c. 2.4.4 d. 2.4.5 e. 2.4.6 f.

[edit] Study Session 2

[edit] 5. Time Value of Money

[edit] a. real risk-free rate, inflation, premiums

nominal risk-free rate = real risk-free rate + expected inflation rate

• default risk
• liquidity risk
• maturity risk
• required interest rate on a security

[edit] b. EAR

EAR = (1 + periodicrate)m − 1

[edit] c. FV, PV, annuity, perpetuity, annuity due, uneven cash flows

FV = PV(1 + I / Y)N

• FV of an annuity due: FVA_D

• PV of an annuity due:

• Present value of a perpetuity

[edit] d. time line, time index, TVM applications (mortgages, retirement)

[edit] 6. Discounted Cash Flow Applications

[edit] a. Calculate NPV, IRR

• NPV

• IRR (internal rate of return): rate of return that equates PV
• or IRR: discount rate for wich NPV is 0

• NPV decision rules
  • accept (reject) projects with a positive (negative) NPV
  • project with higher NPV should be accepted in case of mutually exclusive projects

[edit] b. Holding period return (HPR, total return)

[edit] c.

[edit] d.

[edit] 7. Statistical Concepts and Market Returns

[edit] a.

[edit] b.

[edit] c.

[edit] d.

[edit] e.

[edit] f.

[edit] g.

[edit] h.

[edit] i.

[edit] j.

[edit] 8. Probability Concepts

[edit] a.

[edit] b.

[edit] c.

[edit] d.

[edit] e.

[edit] f.

[edit] g.

[edit] h.

[edit] i.

[edit] j.

[edit] k.

[edit] l.

[edit] m.

[edit] n.

[edit] Study Session 3

[edit] 9. Common Probability Distributions

[edit] a.

[edit] b.

[edit] c.

[edit] d.

[edit] e.

[edit] f.

[edit] g.

[edit] h.

[edit] i.

[edit] j.

[edit] k.

[edit] l.

[edit] 10. Sampling and Estimation

[edit] a.

[edit] b.

[edit] c.

[edit] d.

[edit] e.

[edit] f.

[edit] g.

[edit] h.

[edit] i.

[edit] j.

[edit] k.

[edit] 11. Hypothesis Testing

[edit] a. Define Hypothesis

[edit] Steps of hypothesis testing

1. . State the hypothesis
2. . Select appropriate test statistic
3. . Specify level of significance
4. . State the decision rule
5. . Collect sample and calculate sample statistics
6. . Make a decision regarding the hypothesis
7. . Make a decision based on the results of the test

[edit] Null hypothesis

[edit] Alternative hypothesis

[edit] One-Tailed, Two-Tailed test of hypothesis

[edit] b.

[edit] c.

[edit] d.

[edit] e.

[edit] f.

[edit] 12. Correlation and Regression

[edit] a.

[edit] b.

[edit] c.

[edit] d.

[edit] e.

[edit] f.

--Ekhcsub 23:27, 7 April 2007 (UTC)