Important midterm info:

Options strategies:
- Covered call (Theory and calc)
- Protective put (theory and calc)
- Straddle (theory)
- Spread (theory)

1 options contract is 100 shares of stock

How to read a limit order book

Know the types of orders: Stop, Limit etc.

Know types of mutual funds i.e equities funds, debt funds, balanced (both equity and debt)
bonds, t-bills, index funds

FCFF (free cash flow of firm), FCFE (free cash flow from equity)

Must know the difference between etf and mutual fund

ETF has a brokerage fee and is traded like a stock, at market price with full shares whereas in a
mutual fund you can pay in a dollar amount and buy and sell amounts with the fund agent
rather than the market.

Open ended vs close ended

A closed-end fund has a fixed number of shares offered by an investment company through an
initial public offering. Open-end funds (which most of us think of when we think mutual funds)
are offered through a fund company that sells shares directly to investors.

Front load (pay commission at the start when buying into mutual fund) vs back load (paid
when you sell or redeem the mutual fund)

Normal Distribution and standard dev

Trin statistics (how to interpret results, page 387 in textbook) if outcome is more than 1 then
there is a bearish outlook and if it is less than 1 then it is bullish
Moving average (3 day moving averages etc. always start at the bottom)

Bond Equivalent yield (BEY) (only applies to canadian bonds)

Bonds discount yield (d) - american bonds

Effective Annualised yield (EAY)

The relationship between ROE, P/E and b. (PVGO)

Questions to practise:

2016 midterm - Questions: 29, 30, 32, 8, 12

2019 midterm - Questions: 2, 3, 10, 11, 12, 18, 19, 21
Tutorial 1 Questions: 2, 6, 7, 8, 12, 13, 14, 17, 18, 25 (chapter 2 extra qs 11)
Tutorial 2 Questions: 1-6, 8, 9, 11-13, 15

Covered call question:

X = $90
Bought at $89
Div = $1 per share
ST = $87
Ask = 4.70
Bid = 4

Return?

R = (90-89 + 1 + 4) / (89) =0.067

Chapter 2

F = Face Value, P = Current Price, N = days until maturity, D = BANK DISCOUNT RATE
Money market
Bond Market

Chapter 3
Chapter 4
Chapter 5
Chapter 12
Chapter 18
Chapter 20

Chapter 21