Articles
How to Read Student's t Distribution Table (With PDF)
Student’s t distribution table has the following structure: The row represents the upper tail area, while the column ...
Why Lognormal Distribution is Used to Describe Stock Prices
The concept of lognormal distribution is very closely related to the concept of normal distribution. Let’s say we hav...
Short-fall Risk, Safety-first Ratio, and Optimal Portfolio S...
Shortfall Risk Shortfall risk refers to the probability that a portfolio will not exceed the minimum return level (ta...
What is Tracking Error
Tracking error is a measure of how closely a portfolio follows its benchmark. A tracking error of zero means that the po...
Constructing Binomial Tree to Describe Stock Price Movement
The future price movement of a stock can be approximated using a binomial tree. In a binomial tree, a stock can Let’s...
New Short Courses: Basics of Options and Option Greeks
We have added two new short courses to our member area - Basics of Options and Option Greeks. The first course - Basi...
How to Construct a Frequency Distribution
The statistical data that we collect can be presented in the form of a frequency distribution. A frequency distribution ...
Present Value of a Perpetuity
A perpetuity is a type of annuity that pays equal cash flows that occur periodically such as monthly, quarterly or annua...
Future Value and Present Value of Ordinary Annuity
An annuity refers to a series of equal cash flows that occur periodically such as monthly, quarterly or annually. For e...
Present Value of a Single Cash Flow
Present value of a single cash flow refers to how much a single cash flow in the future will be worth today. The presen...
Future Value of a Single Cash Flow
Future value of a single cash flow refers to how much a single cash flow today would grow to over a period of time if p...
Time Value of Money for Different Compounding Frequencies
Let’s first review the time value money concept using a very simple example. Example 1 Let’s say you have $2000 t...
Interest Rate Equation
The required interest rate that an investor earns from an investment is made up of various components. The general inte...
Types of Interest Rates
Interest rates are how we measure the time value of money. While making an investment, an investor will need to know the...
CFA Level II Exam - Sample Item Set Questions
In the CFA Level II Exam, the questions are asked in the form of item sets. First a short case or vignette is presented...
PRM Exam 1 - Sample Questions
We recently released our new PRM Exam 1 Practice Question Bank for students preparing for PRM Exam 1. Some of you asked ...
What do Derivative Traders Do?
Earlier a derivative trader may have been found at the stock floor, making estimations and shouting them out. Today, a d...
CFA Experience Requirements
There is more to become a CFA Charterholder than just completing the three levels of CFA exams. While you may have the r...
Why do companies manipulate their financial reports?
Financial reports are to companies what an annual report of health is to a person. Investors, lenders, and prospective k...
CFA Study Plan in Excel (For Level 1)
One thing that I've noticed CFA candidates talk about is about how huge the CFA syllabus is and how difficult it can get...
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