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Equity Analysis

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Quantitative
Continuously compounding  
Nominal annual rate= ln (e rt)= ln(1+HPR)=LN( S2/S1)
Effective annual rate= e rt- 1

Equity
Limit-buy (below market price)and stop-buy(above market price)
Efficient market: depth (willing to trade below and above the market price)
Margin call :   buy=P*(1-IM)/(1-MM)     short= P*(1+IM)/(1+MM)

Adjusting a price-weighted index for stock splits---原价不变, 改变的是denominator

  1) Recession: commodities and stocks.
2)   Recovery: cyclical investments and commodities.
3) Early Expansion: overall stock market and real estate.
4) Late Expansion bonds and interest sensitive investments.
5) Slowing into Recession bonds and interest sensitive investments

Efficient market ; Fundamental; technician 对重大消息反应程度从快到慢

Quota-driven=price-driven dealers &traders
Order-driven
Brokered market
US national market system over the counter

If ROE< k 那么公司宁愿多发dividend, if retained earnings increase , it will lower company’s value
Comparable method guiding principle: law of one price 
P/BV is an appropriate measure of net asset value for firms that primarily hold liquid assets.
P/CF is related to differences in long-run average stock return
P/S can be applied to distressed corporation since sales is always positive; compared to PE used in cyclical firm, P/S is more stable.
EV=market capitalization+ MV of preferred stock+ MV of debt-cash and investments

Derivatives
Discount interest computation applies to Eurodollar futures and T-bill futures
FRA   LIBOR-based add-on interes

Currency swap 一定要交换本金
Currency forward can be settled in cash

Motivation for swap: reduce transaction costs, avoid costly regulation, and maintain privacy.

Alternative investment
Close-end fund= NAV+ market influence

Portfolio Management

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Equity Analysis. Anti Essays. Retrieved December 13, 2018, from the World Wide Web: http://snehaedu.com/free-essays/Equity-Analysis-357454.html