Brain Teasers  You’ve got a 10 x 10 x 10 cube made up of 1 x 1 x 1 smaller cubes. The outside of the larger cube is completely painted red. On how many of the smaller cubes is there any red paint?

Answer  Larger cube is made up of 1000 smaller cubes. The easiest way to think about this is how many cubes are NOT painted? 8 x 8 x 8 inner cubes are not painted which equals 512 cubes. Therefore, 1000 – 512 = 488 cubes that have some paint.

3 Quantitative Finance Society Asset Classes

Announcements  Upcoming Presentations: Anatomy of a Trade Derivatives  Portfolio Invites Successful candidates will be receiving an today about our portfolio meeting tomorrow

Market Update: The Macro View 5

Asset Classes  Equities  Fixed Income  Currencies  Commodities  Alternatives 6

What determines the price of a security?  Supply & Demand 7

Equities  What determines the price of a stock? Everyday movements, news Volume Market Psychology  Multiples (Comparables) Earnings, P/E EV/EBITDA  ETFs  8

Equities  Different sectors, different way to value Healthcare Tech Telecom Financials Consumer Discretionary Consumer Staples Utilities Industrials Energy Materials 9

Fixed Income  Governments Rates – GDP, unemployment, inflation  Corporates Credit + Rates  Mortgages Credit + Rates  Ratings Investment Grade, High Yield, Crossovers 10

Currencies  Directly related to rates  Purchasing Power Parity (PPP)  Balance of Payments  Carry Trade, Interest rate differentials  Country-specific trade characteristics USD, EUR, JPY, GBP, CHF CAD, AUD, NZD, SEK, NOK 11

Commodities  Gold & Precious Metals  Oil, Natural Gas, other Energy  Agricultural 12

Alternatives  Private Equity  Venture Capital  Hedge Funds  Real Estate  Collectibles 13

Questions? 14