Fisher effect is an important exchange rate model developed by Irving Fisher in 1930. The Fisher effect provides the relationship between the nominal interest rates, inflation and real interest rates. According to Fisher effect, the nominal interest rate is the … Continued
CFA Exam
Demand and Supply of Money
Demand of Money The demand for money refers to the total amount of wealth held by the household and companies. The demand for money is affected by several factors such as income levels, interest rates, price levels (inflation), and uncertainty. … Continued
Official Measures of Money: M1 and M2
There are two official measures of money known as M1 and M2. According to New York Fed: “The money supply measures reflect the different degrees of liquidity—or spendability—that different types of money have. The narrowest measure, M1, is restricted to … Continued
How is Money Created?
The process of money creation and the evolution of our current banking system are best explained using stories. One such popular story is the story of a goldsmith. Let’s assume a goldsmith by the name Mark, operating from a small … Continued
What is Money?
Money as we know it has been around for a very long time. The currency notes and coins that we carry with us everyday are all forms of money. In most simple terms, money can be defined as the medium … Continued
Mechanics of Monetary and Fiscal Policy
Monetary and Fiscal policies are the two economic policies employed by the government in an economy to control the aggregate demand. Using the fiscal policy, the government controls their own expenditure and revenue collection in order to control the economy. … Continued
Biases in Hedge Funds Performance Data and Risk Measures
The hedge fund industry does not have a very evolved performance measurement framework. This makes it difficult for investors to depend on the historical records while allocating their funds. The performance data provided by the hedge fund databases and indexes … Continued
Hedge Fund Indexes
The information about hedge funds is not publicly available or listed on any exchange. Investors have to obtain this information directly from the hedge funds or data provider specializing in collecting hedge fund data. Many such hedge fund data providers … Continued
Mock Exams for CFA Level 1 and 2
With just a few days left for the real exam, Finance Train’s CFA Level 1 and 2 Mock Exams can help you assess your exam preparation and your readiness for the exam. The objective of our mock exam is to … Continued
Leverage and Unique Risks of Hedge Funds
There are two important points that need special mention while discussing hedge funds. One, hedge funds make extensive use of leverage. Some people believe that leverage is the major source of risk for hedge funds, while others argue that using … Continued
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