fbpixel 101 concepts level I | IFT World - Part 3
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LM01 Alternative Investment Features, Methods, and Structures.
LM01 Categories, Characteristics, and Compensation Structures of Alternative Investments
LM01 Corporate Structures and Ownership
LM01 Derivative Instrument and Derivative Market Features
LM01 Derivative Instrument and Derivative Market Features.
LM01 Ethics and Trust in the Investment Profession
LM01 Ethics and Trust in the Investment Profession.
LM01 Fixed-Income Instrument Features.
LM01 Fixed-Income Securities: Defining Elements
LM01 Introduction to Financial Statement Analysis
LM01 Introduction to Financial Statement Analysis.
LM01 Market Organization & Structure.
LM01 Market Organization and Structure
LM01 Organizational Forms, Corporate Issuer Features, and Ownership.
LM01 Portfolio Management Overview
LM01 Portfolio Management: An Overview.
LM01 Rates and Returns.
LM01 The Firm & Market Structures.
LM01 Time Value of Money
LM01 Topics in Demand and Supply Analysis
LM02 Alternative Investment Performance and Returns.
LM02 Analyzing Income Statements.
LM02 Code of Ethics and Standards of Professional Conduct Profession
LM02 Code of Ethics and Standards of Professional Conduct.
LM02 Financial Reporting Standards
LM02 Fixed Income Markets - Issuance Trading and Funding
LM02 Fixed-Income Cash Flows and Types.
LM02 Forward Commitment and Contingent Claim Features and Instruments
LM02 Forward Commitment and Contingent Claim Features and Instruments.
LM02 Introduction to Corporate Governance and Other ESG Considerations
LM02 Investors and Other Stakeholders.
LM02 Organizing, Visualizing, and Describing Data
LM02 Performance Calculation and Appraisal of Alternative Investments
LM02 Portfolio Risk & Return: Part I.
LM02 Portfolio Risk and Return Part I
LM02 Security Market Indexes
LM02 Security Market Indexes.
LM02 The Firm and Market Structures
LM02 Time Value of Money in Finance.
LM02 Understanding Business Cycles.
LM03 Aggregate Output, Prices and Economic Growth
LM03 Analyzing Balance Sheets.
LM03 Business Models & Risks
LM03 Corporate Governance: Conflicts, Mechanisms, Risks, and Benefits.
LM03 Derivative Benefits, Risks, and Issuer and Investor Uses
LM03 Derivative Benefits, Risks, and Issuer and Investor Uses.
LM03 Fiscal Policy.
LM03 Fixed-Income Issuance and Trading.
LM03 Guidance for Standards I-VII
LM03 Guidance for Standards I–VII.
LM03 Introduction to Fixed Income Valuation
LM03 Investments in Private Capital: Equity and Debt.
LM03 Market Efficiency
LM03 Market Efficiency.
LM03 Portfolio Risk & Return: Part II.
LM03 Portfolio Risk and Return Part II
LM03 Private Capital, Real Estate, Infrastructure, Natural Resources, and Hedge Funds
LM03 Probability Concepts
LM03 Statistical Measures of Asset Returns.
LM03 Understanding Income Statements
LM04 An Introduction to Asset-Backed Securities
LM04 Analyzing Statements of Cash Flows I.
LM04 Arbitrage, Replication, and the Cost of Carry in Pricing Derivatives
LM04 Arbitrage, Replication, and the Cost of Carry in Pricing Derivatives.
LM04 Basics of Portfolio Planning & Construction
LM04 Basics of Portfolio Planning and Construction.
LM04 Capital Investments
LM04 Common Probability Distributions
LM04 Fixed-Income Markets for Corporate Issuers.
LM04 Introduction to the Global Investment Performance Standards (GIPS)
LM04 Introduction to the Global Investment Performance Standards (GIPS).
LM04 Monetary Policy.
LM04 Overview of Equity Securities
LM04 Overview of Equity Securities.
LM04 Probability Trees and Conditional Expectations.
LM04 Real Estate and Infrastructure.
LM04 Understanding Balance Sheets
LM04 Understanding Business Cycles
LM04 Working Capital and Liquidity.
LM05 Analyzing Statements of Cash Flows II.
LM05 Capital Investments and Capital Allocation.
LM05 Company Analysis: Past and Present.
LM05 Fixed-Income Markets for Government Issuers.
LM05 Introduction to Geopolitics.
LM05 Introduction to Industry and Company Analysis
LM05 Monetary and Fiscal Policy
LM05 Natural Resources.
LM05 Portfolio Mathematics.
LM05 Pricing and Valuation of Forward Contracts and for an Underlying with Varying Maturities
LM05 Pricing and Valuation of Forward Contracts.
LM05 Sampling and Estimation
LM05 The Behavioral Biases of Individuals
LM05 The Behavioral Biases of Individuals.
LM05 Understanding Cash Flow Statements
LM05 Understanding Fixed-Income Risk and Return
LM05 Working Capital & Liquidity
LM06 Analysis of Inventories.
LM06 Capital Structure.
LM06 Cost of Capital-Foundational Topics
LM06 Equity Valuation: Concepts and Basic Tools
LM06 Financial Analysis Techniques
LM06 Fixed-Income Bond Valuation: Prices and Yields.
LM06 Fundamentals of Credit Analysis
LM06 Hedge Funds.
LM06 Hypothesis Testing
LM06 Industry and Competitive Analysis.
LM06 International Trade.
LM06 Introduction to Geopolitics
LM06 Introduction to Risk Management
LM06 Introduction to Risk Management.
LM06 Pricing and Valuation of Futures Contracts
LM06 Pricing and Valuation of Futures Contracts.
LM06 Simulation Methods.
LM07 Analysis of Long-Term Assets.
LM07 Business Models.
LM07 Capital Flows and the FX Market.
LM07 Capital Structure
LM07 Company Analysis: Forecasting.
LM07 Estimation and Inference.
LM07 International Trade and Capital Flows
LM07 Introduction to Digital Assets.
LM07 Introduction to Linear Regression
LM07 Inventories
LM07 Pricing and Valuation of Interest Rate and Other Swaps.
LM07 Pricing and Valuation of Interest Rates and Other Swaps
LM07 Technical Analysis
LM07 Yield and Yield Spread Measures for Fixed-Rate Bonds.
LM08 Currency Exchange Rates
LM08 Equity Valuation: Concepts and Basic Tools.
LM08 Exchange Rate Calculations.
LM08 Fintech in Investment Management
LM08 Hypothesis Testing.
LM08 Long Lived Assets
LM08 Measures of Leverage
LM08 Pricing and Valuation of Options
LM08 Pricing and Valuation of Options.
LM08 Topics in Long-Term Liabilities and Equity.
LM08 Yield and Yield Spread Measures for Floating-Rate Instruments.
LM09 Analysis of Income Taxes.
LM09 Income Taxes
LM09 Option Replication Using Put-Call Parity
LM09 Option Replication Using Put–Call Parity.
LM09 Parametric and Non-Parametric Tests of Independence.
LM09 The Term Structure of Interest Rates: Spot, Par, and Forward Curves.
LM10 Financial Reporting Quality.
LM10 Interest Rate Risk and Return.
LM10 Non-current (Long-Term) Liabilities
LM10 Simple Linear Regression.
LM10 Valuing a Derivative Using a One-Period Binomial Model
LM10 Valuing a Derivative Using a One-Period Binomial Model.
LM11 Financial Analysis Techniques.
LM11 Financial Reporting Quality
LM11 Introduction to Big Data Techniques.
LM11 Yield-Based Bond Duration Measures and Properties.
LM12 Applications of Financial Statement Analysis
LM12 Introduction to Financial Statement Modeling.
LM12 Yield-Based Bond Convexity and Portfolio Properties.
LM13 Curve-Based and Empirical Fixed-Income Risk Measures.
LM14 Credit Risk.
LM15 Credit Analysis for Government Issuers.
LM16 Credit Analysis for Corporate Issuers.
LM17 Fixed-Income Securitization.
LM18 Asset-Backed Security (ABS) Instrument and Market Features.
LM19 Mortgage-Backed Security (MBS) Instrument and Market Features.
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Category: 101 Concepts for Level I

Concept 20: Perfect Competition, Monopolistic Competition, Oligopoly & Monopoly

            Perfect competition Monopolistic competition Oligopoly Monopoly Number of firms Many firms Many firms Few firms Single firm Barriers to entry Very low Low High Very high Nature of substitute products Very close substitutes Substitutes but differentiated Very close substitutes or differentiated No good substitutes Nature of competition Price only Price, marketing & features Price, marketing & features Advertising Pricing power None Some Some to significant Significant Demand curve for the firm Perfectly elastic (Horizontal) Downward sloping, yet elastic Downward sloping Downward Sloping Example Rice market Soap Aircraft manufacturers Utility companies Key points Overall market supply and demand, determine the… Read More

101 concepts level I

Concept 21: Concentration Measures

The two concentration ratios used to measure the market power of the firm. N-Firm Concentration Ratio Sum of the market shares of the N largest firms in an industry. Market share = firm revenue / total market revenue. Advantage: Simple to calculate and understand. Disadvantages: Ignores barriers to entry, does not directly measure market power or elasticity of demand. Herfindahl-Hirschman Index (HHI) HHI = sum of squared market shares of N largest firms in a market. Ranges from 0 to 1: where 0 indicates perfect competition and 1 indicates a perfect monopoly. Consider the market share of the following firms:… Read More

101 concepts level I

Concept 22: Gross Domestic Product (GDP)

Gross domestic product refers to the market value of all final goods and services produced in a country over a specific time period, usually one year; government transfers and goods/services without market value are not included. There are two approaches to calculate GDP: The income approach computes GDP as the total income earned by households, businesses and the government in the country during a time period. The expenditure approach Can be computed through the sum-of-value-added approach where GDP is calculated by summing the additions to value created at each stage of production & distribution Can be computed through the value-of-final-output… Read More

101 concepts level I

Concept 23: Aggregate Supply Curve

The aggregate supply curve shows the positive relationship between GDP and the price level In the very short run, companies change output to some degree without changing prices. In the short run input prices are fixed so businesses expand real output when output prices increase. In the long run aggregate supply is perfectly inelastic (vertical) and represents the potential GDP which is the full-employment level of economic output. Shifts in the SRAS are cause by changes in input prices, expectations about the future, changes in business tax rates, changes in subsidies, currency exchange rates. Shifts in the LRAS are caused… Read More

101 concepts level I

Concept 24: Business Cycle

Business cycles refer to the fluctuation in economic activity where the real GDP and unemployment vary through time. The four stages of the business cycle are: expansion, peak, contraction and trough. Business cycle characteristics Trough: GDP growth rate changes from negative to positive. High unemployment rate and a moderate or declining inflation. Increasing production to meet the pickup in sales with more flexible methods like overtime or increasing utilization levels. Housing activity starts to pick up coupled with an increase in consumer spending. Expansion: GDP growth rate increases. Reduction in unemployment rate as hiring rises. Inflation may begin to rise…. Read More

101 concepts level I

Concept 25: Theories of The Business Cycle

Theory Causes of Business Cycles Recommended Policy Neoclassical Changes in technology. No action is necessary; wages and prices adjust through demand-supply characteristics pulling or pushing the economy form expansion or recession level to its full-employment level. Keynesian Shifts in AD due to changes in business expectations can lead to over or under investments. Downward sticky wages prevent a self-recovery from contraction (SRAS curve is slow to move down). Authorities should use fiscal and/or monetary policy to shift the AD curve directly to get the GDP to its full employment level. New Keynesian In addition to Keynesian beliefs, this theory believes… Read More

101 concepts level I

Concept 26: Unemployment

Unemployment types Frictional unemployment is caused by the time lag necessary to match employees seeking work with employers seeking their skills. Structural unemployment is caused by long-run changes in the economy that eliminate some jobs and require workers to gain new skills to be capable of the available jobs. Cyclical unemployment is caused by changes in the business cycle. Measures of unemployment To be considered unemployed, a person must be actively searching for work. Labor force includes employed and unemployed people. Participation ratio (Activity ratio) = Labor Force / working-age population (Age group: 16 – 64). Unemployment rate is the… Read More

101 concepts level I

Concept 27: Inflation, Hyperinflation, Disinflation & Deflation

Inflation is the persistent increase in general price levels over time. The inflation rate refers to the percentage increase in price level over a period. Disinflation refers to the decrease in the inflation rate over time i.e. price levels are increasing at a lower rate (e.g. from 6% to 4%). Deflation is the persistent decrease in general price levels over time. Hyperinflation refers to out of control acceleration of inflation which can destroy a country’s monetary system and bring about social and political upheavals.

101 concepts level I

Concept 28: Inflation Measures

Laspeyres index is the most common type of index; which uses a constant basket of goods and services. The three factors that cause the index to biased upwards are: New goods: Older goods are replaced by newer goods that are initially more expensive. Quality changes: Quality improvements can cause the increase in basket price without any inflation. Substitution: Consumers prefer substitute products. Paasche index uses the current weights of basket to derive the base year basket price while determining the rate of change.  It is used to address the issue arising from substitution. Fischer index is a geometric mean of… Read More

101 concepts level I

Concept 29: Monetary v/s Fiscal Policy

Both policies are used to maintain stable prices and promote positive economic growth. Monetary policy: Refers to central bank actions aimed at influencing the money supply and credit in an economy through interest rates, repo rates, open market operations and other methods. Expansionary or accommodative or easy monetary policy: Increases money supply and credit in the economy. Contractionary or restrictive or tight monetary policy: Decreases money supply and credit in the economy. Fiscal policy: Refers to government actions aimed at influencing economic activity through taxation and spending. Balanced budget: Tax revenues equal government spending. Budget surplus: Tax revenues exceed government… Read More

101 concepts level I
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