##### Evolution of Portfolio Theory Efficient Frontier to SML (Calculations for CFA® and FRM® Exams)

Evolution of Portfolio Theory In theory, we could form a portfolio made up of all investable assets, however, this is not practical and we must find a way of filtering the investable universe. A risk-averse investor wants to find the…

##### Timelines – Your Best Friends (Calculations for CFA® and FRM® Exams)

What is a timeline? A timeline is an physical illustration of the amount and the timing of cash flows associated with an investment project. Some of the applications of a timeline include: Quantitative Methods: Time Value of Money Capital Budgeting…

##### Portfolio Return and Variance (Calculations for CFA® and FRM® Exams)

Portfolio Expected Return Portfolio expected return is the sum of each of the individual asset’s expected return multiplied by its associated weight. Thus: $${E(R_p)}=\sum{w_ir_i}$$ Where: $$i$$ = 1, 2, 3, …, n; $$w_i$$ = the weight attached to asset i;…

##### Beta and CAPM

Beta Beta is a measure of systematic risk, which refers to the risk inherent to the entire financial market. This is the risk that you cannot get rid of by diversifying across different securities. A common misconception is that Beta…

##### Demystifying Forward Rate Agreements (Calculations for CFA® and FRM® Exams)

A forward rate agreement (FRA) is a cash-settled over-the-counter (OTC) contract between two counterparties, where the buyer is borrowing (and the seller is lending) a notional sum at a fixed interest rate (the FRA rate) and for a specified period starting at…

##### FRM Exam Preparation

The world is currently in a dark place with the ongoing rise in coronavirus cases. The adverse effects brought about by the pandemic are despicable. People and industries alike have been affected. There is an imminent risk of companies going…

##### Necessary Skills Needed to Pass the CFA® Exams

In this article, we are assuming that you are already enrolled in the CFA® Program, and if not, you are an aspiring CFA Program candidate. Most, if not all, CFA Program candidates wish to pass their CFA exams on their…