Blog - Page 85 of 152 - CFA, FRM, and Actuarial Exams Study Notes

January 28, 2023 in CFA Level II Study Notes, Economics by AnalystPrep Team

Spot Rate, Forward Rate, and Forward Premium/Discount

A spot exchange rate is the general price level in the market used to directly trade one currency for another, with the exchange occurring at the earliest possible time. The standard delivery time for spot currency transactions is no longer…

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January 23, 2023 in CFA Level II Study Notes, Economics by AnalystPrep Team

The Bid-offer Spread

An exchange rate is the price of the base currency expressed in terms of the price currency. For example, assume that the USD/CAD rate is 0.7625. This implies that the Canadian dollar, the base currency, costs 0.7625 US dollars (One…

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January 14, 2023 in Operational and Integrated Risk Management by AnalystPrep Team

Risk Governance

After completing this reading, you should be able to: Explain Basel regulatory expectations for an operational risk management framework’s governance. Describe and compare the roles of different committees and the board of directors in operational risk governance. Describe the…

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January 13, 2023 in CFA Level II Study Notes, Financial Reporting and Analysis (FRA) by Irene R

Projections Beyond the Short-term Forecast Horizon

After forecasting for the forecast period, analysts estimate the terminal value based on long-term projections. When using the historical multiples-based approach to estimate the terminal value of a company, the analyst assumes that the past is a good reflection of...

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January 13, 2023 in CFA Level II Study Notes, Financial Reporting Analysis (FRA) by Irene R

The Forecast Time Horizon

The forecast time horizon is influenced by the following: The investment strategy being considered: Professionally managed equity investments have an investment timeframe or the average holding period for a stock, corresponding with the average annual portfolio turnover. The cyclicality of...

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January 13, 2023 in CFA Level II Study Notes, Financial Reporting and Analysis (FRA) by Irene R

Effects of Technological Developments on Demand, Selling Prices, Costs, and Margins

Businesses and industries are affected by technological developments. It is, however, impossible to quantify these impacts without making assumptions about the future. These assumptions should be evaluated using scenario and sensitivity analysis to develop a range of earnings outcomes. There...

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January 13, 2023 in CFA Level II Study Notes, Financial Reporting and Analysis (FRA) by Irene R

Forecasting Industry and Company Sales and Costs When Subject to Inflation or Deflation

Inflation and deflation affect the accuracy of a company’s forecasts. The impact of inflation and deflation varies in the case of revenues and expenses. Some companies can pass on higher input costs by raising the prices of their products. Companies...

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January 12, 2023 in CFA Level II Study Notes, Financial Reporting and Analysis (FRA) by Nicolas Joyce

The Impact of Competitive Position on Prices and Costs

Analysts forecast items such as revenues and profit margins. The competitive environment in which a company operates affects these items. Further, analysts’ projections for these items are based on an estimate of a company’s future competitive strength. Analysts use Michael...

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January 10, 2023 in Current Issues in Financial Markets, FRM, Part 2 by AnalystPrep Team

Machine Learning and AI for Risk Management

After completing this reading, you should be able to: Explain the distinctions between the two broad categories of machine learning and describe the techniques used within each category. Analyze and discuss the application of AI and machine learning techniques in…

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January 9, 2023 in CFA Level II Study Notes, Financial Reporting and Analysis (FRA) by Irene R

The Impact of Competitive Position on Prices and Costs

Analysts forecast such things as revenues and profit margins. These things are affected by the competitive environment in which a company operates. Note that analysts base their projections on an estimate of a company’s future competitive strength. Analysts use Michael...

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