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Dr. Krzysztof Ostaszewski, FSA, CFA, MAAA Actuarial Program
Dr. Krzysztof Ostaszewski, FSA, CFA, MAAA Actuarial Program

... There is also a third group of financial assets: derivative securities. A derivative security has its cash flows derived from cash flows of other securities. It does not relate directly to income produced in economic activity, but rather, it relates to it indirectly, through other securities. Assets ...
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... released each year, and many of these products have substantial production or acquisition costs and marketing budgets. During fiscal 1997, two titles accounted for approximately 23% and 16% respectively, of the Company's consolidated net revenues. During fiscal 1998, two other titles accounted for a ...
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... consumers purchase fewer mattresses than they would if the economy was stronger. However, if the economy is in a flat-out recession, a large number of consumers who were planning to purchase a more expensive inner spring mattress may purchase, instead, a cheaper foam mattress. Under these circumstan ...
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... particular, our investors are risk-neutral, and short-selling is prohibited. Our main result is an explicit formula for the minimal equilibrium price. We also characterize this price as the unique classical solution (with linear growth at infinity) of a certain second-order, linear differential equa ...
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... preferred stock than the existing investor could have purchased with its own investment, thereby significantly diluting the investor's ownership interest in the enterprise. ...
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... Decorative coatings - Decorative electroplating chemistries developed to enable plating directly onto plastic in industrial and automotive markets Wear resistant coatings - Chromium electroplating chemistries used in industrial applications and for use on auto parts such as engine valves and shock a ...
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... asset bubbles can exist in an economy with endogenous growth provided they arc not too asset bubbles can exist in an economy with endogenous growth provided they are not too large and that the growth rate in the equilibrium without bubbles exceeds the interest rate. large and that the growth rate in ...
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... 1. The big bath – This form of income manipulation can be thought of as part of income smoothing. What it usually does is effectively accelerate expenses and losses into a single year with already poor results so that future income looks better and smoother. Even though the FASB has issued fairly re ...
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... 2006: 43.53 e millions) is always higher than R&D stock (19.74) and physical capital (30.08). Moreover, in both the samples OC has registered the highest increase in the period 2005-2006: median growth rate of 15% for R&D firms and 18% for non-R&D firms, against, respectively, 1% and 5% for physical ...
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... comparisons of firm performance over time and also compare performance across different firms. Financial ratios are statistical yardsticks that relate two numbers generally taken from a firm’s income statements and balance sheets. Financial ratios fall into five categories: liquidity ratios, asset m ...
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... The Statement of Stockholders’ Equity Many corporations are preparing a statement of stockholders’ equity rather than a statement of retained earnings. This statement reports the changes in all stockholders’ equity accounts during the period. Information reported on the statement includes  the numb ...
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... investors experience. Volatility is a measure of dispersion around the mean or average return of a security. One way to measure volatility is by using the standard deviation, which tells you how tightly the price of a stock is grouped around the mean or moving average (MA). When the prices are tight ...
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solutions to the November 2005 Course FM/2 Examination 1
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... so that with the values given 118.20 = 4  a20 3% + C 1.0320. This can be solved using a financial calculator with n = 20, i = 3%, PV = 118.20, PMT = 4, resulting in C  106.00. Alternatively, C = 118.20 1.0320  4  s20 3%  106.00. Answer D. 5. November 2005 Course FM/2 Examination, Problem No. ...
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... • “Bid-Ask” Spread – the prior trade may have been at a bid, while your trade may be at the ask price (reverse if selling) • Market trend – are prices moving higher? • Liquidity impact – your demand may exceed share available a lower price – Or, shares sold may exceed the number purchased at higher ...
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Stock valuation

In financial markets, stock valuation is the method of calculating theoretical values of companies and their stocks. The main use of these methods is to predict future market prices, or more generally, potential market prices, and thus to profit from price movement – stocks that are judged undervalued (with respect to their theoretical value) are bought, while stocks that are judged overvalued are sold, in the expectation that undervalued stocks will, on the whole, rise in value, while overvalued stocks will, on the whole, fall.In the view of fundamental analysis, stock valuation based on fundamentals aims to give an estimate of the intrinsic value of a stock, based on predictions of the future cash flows and profitability of the business. Fundamental analysis may be replaced or augmented by market criteria – what the market will pay for the stock, without any necessary notion of intrinsic value. These can be combined as ""predictions of future cash flows/profits (fundamental)"", together with ""what will the market pay for these profits?"" These can be seen as ""supply and demand"" sides – what underlies the supply (of stock), and what drives the (market) demand for stock?In the view of others, such as John Maynard Keynes, stock valuation is not a prediction but a convention, which serves to facilitate investment and ensure that stocks are liquid, despite being underpinned by an illiquid business and its illiquid investments, such as factories.
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