Value at Expiration and Profit for Call and Put Options
In an options contract, two parties transact simultaneously. The buyer of a call or a put option is the long position in the contract, while the seller of the option, also known as the writer of the option, is the…
ESG Considerations in Portfolio Planning and Construction
Environmental, social, and governance factors are collectively referred to by the acronym “ESG”. ESG integration is the practice of considering environmental, social, and governance factors in the investment process. The integration can be implemented across all asset classes, including equities,…
The Asset Management Industry
[vsw id=”ILj5hT_N3TU” source=”youtube” width=”611″ height=”344″ autoplay=”no”] Buy-Side vs. Sell-side Asset managers are typically deemed to be on the buy-side. This ideally means that they buy the products of sell-side firms. Buy-side firms include asset managers, hedge funds, institutional investors, and…
CFA Level 1 Study Notes – Economics
Older Curriculums 2024/2025, 2025/2026 Curriculums Learning Module 1 – The Firm and Market Structures LOS a: determine and interpret breakeven and shutdown points of production, as well as how economies and diseconomies of scale affect costs under perfect and imperfect…
Bayes’ Formula
Bayes’ formula is used to calculate an updated or posterior probability given a set of prior probabilities for a given event. It’s a theorem named after Reverend T Bayes and it is widely used in Bayesian methods of statistical inference.
Firms’ Supply Function Under Different Market Structures
A supply function is a mathematical expression that represents the relationship between the units of quantity of a product or service demanded, its price, and other deterministic factors such as input costs, prices of substitutes, etc. The dependent variable…
Optimal Price and Output Level Under Different Market Structures
An optimal price can be defined as the price at which a 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,…
Factors Affecting Long-run Equilibrium Under Each Market Structure
A firm is said to be at 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…
Solving Counting Problems through Labeling, Factorial Notations, Combinations, and Permutations
Counting problems involve determination of 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 to choose 7 chartered analysts comprising 3 women and…
Introduction to Probability Distributions, Probability Functions, and Types of Variables
Probability Distribution The probability distribution of a random variable “X” is basically a graphical presentation of the probabilities of all possible outcomes of X. A random variable is any quantity for which more than one value is possible. An example…
