HS 328 Video: Investments

Identify the important features of each of the major security laws as they affect investors.

Explain why the combination of two risky securities can produce a portfolio with less risk than either separately, and compute both the expected rate of return and the standard deviation for any two-security portfolio.

Describe a multifactor model.

Describe the term structure of interest rates, and explain the investment implications of the term structure.

HS 328 Course Introduction

Construct a profit function for combinations of options and stocks.

Explain the basic model of personal taxation, compute a tax liability, and identify the relevant marginal tax rate.

Compute the cost basis or adjusted cost basis of an investment.

Determine the tax consequences of various equity investments, including the treatment of capital gains and losses as well as qualified and nonqualified dividend income.

Discuss the pros and cons of tax-loss harvesting and tax-efficient investing.

Avoid subjecting a client to violations of the wash-sale rule for various types of investments.

Compute the tax consequences associated with investing in various types of bonds, including a tax-equivalent yield.

Describe the tax issues associated with investing in investment companies, options, annuities, LPs and MLPs, as well as futures contracts.

Demonstrate the tax advantages of net unrealized appreciation on stock distributions from a pension plan, tax-harvesting losses in an IRA account, and the tax implications of converting assets from a traditional IRA to a Roth IRA.

Explain the various characteristics of mutual funds, including their sales fees, benefits, and disadvantages.

Describe how closed-end funds work.

Decide whether an ETF or an index fund is more appropriate for a client.

Describe the differences between REITs, RELPs, and REMICs.

Decide whether an ETF or an index fund is more appropriate for a client.

Identify the important characteristics to consider in selecting an appropriate mutual fund for a client.

Reconcile the poor average performance of mutual funds with their appropriateness for an investor's portfolio.

Describe the key nonmarketable instruments available to a client.

Explain what is meant by the money market and describe the key money market instruments.

Describe the various securities and interest rates related to the money market.

Describe the general characteristics of government and government-related bonds.

Describe the general characteristics of corporate bonds.

Explain the process of corporate bankruptcy.

Describe the different features of mortgage-backed securities.

Discuss other types of debt instruments, including international bonds, private placements, promissory notes, and insurance-based contracts.

Describe the tools of monetary policy and how they work.

Describe the goals and the problems in implementing fiscal and monetary policy.

Describe the life-cycle of an industry.

Interpret a balance sheet, an income statement, and a statement of cash flows.

Analyze a company with respect to its liquidity, use of financial leverage, and profitability.

Analyze a company with respect to its activity and other ratios, including the use of a Du Pont analysis.

Describe a business cycle, and explain what is meant by leading, coincident, and lagging indicators.

Describe the tools of fiscal policy and how they work.

Describe how the optimal portfolio for an investor is the tangency between the efficient frontier and the highest possible indifference curve.

Show why an investor would prefer as low a correlation coefficient as possible for a two-security portfolio.

Explain why the fact that the "new" efficient frontier as defined by the capital market line (CML) dominates the "old" efficient frontier produced by N risky assets alters one's perception of the appropriate portfolio for an investor to hold.

Explain the roles of beta and the coefficient of determination in defining the risk of a particular security as part of the capital asset pricing model (CAPM).