Solving Counting Problems through Labeling, Factorial Notations, Combinations, and Permutations

Counting problems involve determining the exact number of ways two or more operations or events can be performed together. For instance, we might be interested in the number of ways we can choose 7 chartered analysts comprising 3 women and…

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Factors Affecting Long-run Equilibrium under each Market Structure

A firm is said to be in equilibrium if the marginal cost (MC) is equal to marginal revenue (MR) and that is the profit-maximizing level of output. Perfectly Competitive Markets In the long run, if firms under perfectly competitive markets…

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Optimal Price and Output level Under different Market Structures

An optimal price can be defined as the price at which the seller can make the highest profit possible, that is, the seller’s price is maximized. The rule of marginal output postulates that profit is maximized by producing an output,…

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Firms’ Supply Function Under Different Market Structures

A supply function is a mathematical expression that represents the relationship between the units of quantity demanded of a product or service, its price and other deterministic factors such as input costs, prices of substitutes, etc. The dependent variable is…

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Bayes’ Formula

Bayes’ formula is used to calculate an updated/posterior probability given a set of prior probabilities for a given event. It’s a theorem named after the reverend T Bayes and is used widely in Bayesian methods of statistical influence.

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CFA Level 1 Study Notes – Equity Investments

Study Session 12 Reading 36 – Market Organization and Structure – LOS 36a: explain the main functions of the financial system – LOS 36b: describe classifications of assets and markets – LOS 36c: describe the major types of securities, currencies, contracts,…

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CFA Level 1 Study Notes – Portfolio Management

Study Session 18 Reading 51 – Portfolio Management: An Overview – LOS 51a: describe the portfolio approach to investing– LOS 51b: describe types of investors and distinctive characteristics and needs of each– LOS 51c: describe defined contribution and defined benefit pension…

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CFA Level 1 Study Notes – Financial Reporting and Analysis

Study Session 6 Reading 19 – Introduction to Financial Statement Analysis –LOS 19a: describe the roles of financial reporting and financial statement analysis –LOS 19b: describe the roles of the statement of financial position, statement of comprehensive income, statement of…

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Activity Variation with Business Cycle

Resource Use During a Recession Resources required for the production of goods and services are closely related to the business cycle. Aggregate demand reduces with the beginning of a downturn resulting in the accumulation of inventories. As a result, companies may…

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Price, Marginal Revenue, Marginal Cost, Economic Profit, and the Elasticity of Demand

Marginal revenue (MR) and marginal cost (MC) affect the way a company makes its production decisions. Marginal cost (MC) refers to the increase in the cost that is brought by producing an extra unit. It is the additional cost of producing an…

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