1. Review
Fundamental analysis is about determining the value of an asset. The value of an asset is a function of its future dividends or cash flows.
Dividends, earnings, and cash flows of a firm are all tied to the status of the whole economy especially for some firms and industries
So it’s good to start with analyzing the economy, then the industry, then the position of the firm in the industry. We call this top-down approach

2. Chapter 1: A Brief History of Risk and Return
We Calculate Returns Using Several Methods
The Historical Record (Average Returns, Variance and Standard Deviation)
Average Returns: The First Lesson (The Risk-Return Trade-Off)---Risk Premiums
Return Variability: The Second Lesson
Frequency Distributions and Variability & Normal Distribution
Arithmetic Returns versus Geometric Returns
Dollar Weighted Average Returns

3. Chapter 2 The Investment Process
What is Margin?
Short Sale?
Short Sale Vs. long position?

4. Ch19: Global Economic Activity & Industry Analysis
Top-Down Analysis
Global Macroeconomic Activity
Real GDP, Business Cycles, Economic Indicators
The Global Economy and Stock Return Correlations
The Effects of Exchange Rates on Global Investments
Monitoring Jobs and the Price Level (Labor Market Indicators & Consumer Price Index)
Monetary and Fiscal Policy
Industry Analysis: Identifying Sectors & Porter’s Five Forces

5. Ch4: Mutual Funds & Other Investment Companies
Investment Companies and Fund Types (Open-End versus Closed-End Funds& NAVs)
Mutual Fund Operations
Mutual Fund Organization and Creation & The Fund Prospectus and Annual Report
Mutual Fund Costs and Fees (Types of Expenses and Fees & Expense Reporting)
Short-Term Funds (Money Market Mutual Funds & Money Market Deposit Accounts)
Long-Term Funds Stock Funds, Bond Funds & Stock and Bond Funds
Mutual Fund Performance Information
Closed-End Funds, Exchange Traded Funds, and Hedge Funds
Closed-End Funds Performance Information (Discount Mystery)
Exchange Traded Funds (ETFs), Leveraged Funds & Hedge Funds

6. Chapter 5 Review Private and Public Equity
Private Equity Funds
The Primary and Secondary Stock Markets
The Primary Market for Common Stock
The Secondary Market for Common Stock
Dealers and Brokers
The New York Stock Exchange
Designated Market Makers, DDMs
Types of Members
NYSE-Listed Stocks
Operation of the New York Stock Exchange
Special Order Types
NYSE and NASDAQ Competitors
Stock Market Information
The Dow Jones Industrial Average
Stock Market Indexes
More on Price-Weighted Indexes
Value-Weighted Indexes

7. Ch 6 Common Stock Valuation (Security Analysis)
The Dividend Discount Model
Constant Dividend Growth Rate Model
The Sustainable Growth Rate
The Two-Stage Dividend Growth Model
Discount Rates for Dividend Discount Models
Observations on Dividend Discount Models
Residual Income Model (RIM), Free Cash Flow Model, Price Ratio Analysis

8. Ch 7: Stock Price Behavior and Market Efficiency
Foundations and Forms of Market Efficiency
Some Implications of Market Efficiency
Does Old Information Help Predict Future Stock Prices?
Random Walks and Stock Prices
How Does New Information Get into Stock Prices?
Informed Traders and Inside Trading
How Efficient are Markets? (Are Financial Markets Efficient?)
Some Implications: The Performance of Professional Money Managers
Anomalies & Bubbles and Crashes

9. Ch 8: Behavioral Finance & the Psychology of Investing
Behavioral Finance: Introduction and Definition
3 Conditions that Lead to Efficient Markets
Investor rationality, Independent deviations from rationality & Arbitrage
Prospect Theory (Frame Dependence, Mental Accounting, Loss Aversion, House Money)
Overconfidence (The Illusion of Knowledge & The Snakebite Effect)
Sentiment-Based Risk and Limits to Arbitrage
Technical Analysis: Why does it Thrive?
Market Sentiment Index, Support and Resistance Levels & Moving Averages

10. Ch 11: Diversification and Risky Asset Allocation
Expected Returns and Variances (Expected returns & Calculating the variance)
Portfolios: Portfolio weights, Portfolio expected returns &Portfolio variance
Diversification and Portfolio Risk: The principle of diversification
Correlation and Diversification: Why diversification works
Calculating portfolio risk
The Markowitz Efficient Frontier: Risk and return with multiple assets

11. Ch 12: Return, Risk & the Security Market Line
Announcements, Surprises, and Expected Returns
Expected and unexpected returns (Announcements and news)
Risk: Systematic and Unsystematic
Diversification, Systematic Risk, and Unsystematic Risk
Systematic Risk and Beta: Measuring systematic risk: Portfolio Betas
The Security Market Line: Beta and the risk premium
The reward-to-risk ratio
More on Beta: Where do Betas come from? Ways to calculate Beta
Why do Betas differ?

12. Ch 13: Performance Evaluation & Risk Management
Performance Evaluation Well-Known Performance Evaluation Measures
The Sharpe Ratio, Treynor Ratio & Jensen’s Alpha
Other Performance Evaluation Measures: Information Ratio & R-Squared
Comparing Performance Measures (Strengths and weaknesses)
Sharpe-Optimal Portfolios
Investment Risk Management and Value-at-Risk (VaR)