2. Interview News
WSJ – Economics & News – many people writing for them – well known people
Bloomberg – Ticker – indenficiation –graphs – BBG realizes – Analyst from Banks
Reuter – RIC – graphs
Financial Times – subscription – more about news and less about data

3. Bloomberg Chart of the Day
Division of News in terms of different securities and sectors
Similar to topics of CFA Exam covers all areas
Indices – Index provides MSCI, DB, Sunguard…
Investible index
UK Healthcare index – short position – short UK healthcare

4. Index Weighted by Market Cap EV = Market Cap + Debt
Number of stocks * market traded today
MSCI World Index

5. Awareness about Markets
Global Economy
Markets
Story – We are the all time high on Equity market – something like dot com boom

6. CFA Currcuulum of Economics Level 2 Exam
Forex rate

7. Bond
Corporate Debt – spread would decrease – companies are raise debt at cheap prices – return on bond is low
Sovereign Debt – US treasury
‘Structured Securities’ – MBS-
Securitized – ABS
Other structured products

8. Alternative investments
Hedge Funds
Private Equity
Real Estate market
Commodities
Emerging Markets

9. Structuring Loan – they don’t have capacity
Hedge funds, pension funds….
Structure many loans
100 – 5%
80+20
1%, 2%
Prepayment risk
Defaults – I am taking the loss
Priority on the payments upper tranche – beat the loss

10. Markets S&P 500 – Equity Market – ownership – risk return
MSCI Global Index – global equity
Interest rates –
Debt Market – GDP, MBS
Proxies in term of indices

11. k 5%
10,10,10,10,110
Tranches - Equity Tranche -
Pool – collection of cash flows priority which is pre decided
Two Tranches
100 AAA - protected 3%
3,3,3,3,103
Equity tranche - new rule – very Bad rating
100 7%
7,7,7,7,107
Sell the 200k loan and recovery 180

12. Prepayment rate – CPR – SMM – 6%-12% - http://www. investopedia

13. Chance of interest rate increase
Bond portfolio 100 2% 95 2

14. Sovereign debt Treasury US govt Municipal bonds –
Detroit bankrupts in municipal bonds
Risk Countries euro Zone

15. Industry you follow Tech – Moore Law, silicon manufacturing, patents
Google buying Motora - lenenvo – patents
Amd buying radeon
Oil and Gas – updown stream, exploration rigs quality of oil (crude brent) etc
Retail – renting
Healthcare
Custom adjustments
Sectors in Investment Baking – wholesale

16. Oil Gas

17. Moores Law Be prepared – IT – Apple - Valuation Metric
18 months the computation power double - Hardware – multi core Mobile processors -
15 vs CPUS – 2 CPUS
32nm – 45 nm
Equity research report – Sell side IB teams

18. Piyush
Apple – Valuation Metric
WACC -

19. CAPM
Risk – SD
High regression coeff with Market – if market mvoes 1% moves beta is 2 – 2%
Beta
CAPM =
Return = Rf + beta (MRP)
MRP (Rm – RF)
10 UST 2.6%
Return of apple =

20. Corp Bonds Face value at the end Coupon = interest bond / yield
Poor – yield 2/90 = 3%
Yield is coupon divided by price of the bond traded in the market (simple definition)
Where coupon is the amount promised to be paid each year to whoever owns the bond
Coupon is fixed – but the price the bond in market may vary
Which means that yield which is coupon/market price may vary
100$ FV 2$
10 years
2025 – 100 back…