Linear Regression
After completing this reading, you should be able to: Describe the models that can be estimated using linear regression and differentiate them from those which cannot. Interpret the results of an OLS regression with a single explanatory variable. Describe the…
Country Risk: Determinants, Measures, and Implications
After completing this reading you should be able to: Explain how a country’s position in the economic growth life cycle, political risk, legal risk, and economic structure affect its risk exposure. Evaluate composite measures of risk that incorporate all major…
Commodity Forwards and Futures
After completing this reading, you should be able to: Explain the key differences between commodities and financial assets. Define and apply commodity concepts such as storage costs, carry markets, lease rate, and convenience yield. Identify factors that impact prices on…
Common Univariate Random Variables
After completing this reading, you should be able to: Distinguish the key properties among the following distributions: uniform distribution, Bernoulli distribution, Binomial distribution, Poisson distribution, normal distribution, lognormal distribution, Chi-squared distribution, student’s t, and F-distributions, and identify common occurrences of…
Quantitative Analysis
1. Fundamentals of Probability 2. Random Variables 3. Common Univariate Random Variables 4. Multivariate Random Variables 5. Sample Moments 6. Hypothesis Testing 7. Linear Regression 8. Regression with Multiple Explanatory Variables 9. Regression Diagnostics 10. Stationary Time Series (Available for AnalystPrep Premium Users; Click Here) 11. Nonstationary Time Series (Available for AnalystPrep Premium Users; Click…
Stress Testing
After completing this reading, you should be able to: Describe the rationale for the use of stress testing as a risk management tool. Describe the relationship between stress testing and other risk measures, particularly in enterprise-wide stress testing. Describe stressed…
Pricing Conventions, Discounting, and Arbitrage
After completing this reading, you should be able to: Define discount factor and use a discount function to compute present and future values. Define the “law of one price,” explain it using an arbitrage argument, and describe how it can…
Options Markets
After completing this reading, you should be able to: Describe the various types and uses of options, define moneyness. Explain the payoff function and calculate the profit and loss from an options position. Explain how dividends and stock splits can…
Binomial Trees
After completing this reading you should be able to: Calculate the value of an American and a European call or put option using a one-step and two-step binomial model. Describe how volatility is captured in the binomial model. Describe how…
Valuation and Risk Management
1. Measures of Financial Risk 2. Calculating and Applying VaR 3. Measuring and Monitoring Volatility 4. External and Internal Ratings 5. Country Risk 6. Measuring Credit Risk 7. Operational Risk 8. Stress-Testing 9. Pricing Conventions, Discounting, and Arbitrage 10. Interest Rates 11. Bond Yields and Return Calculations 12. Applying Duration, Convexity, and…
