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Questions and Answers
What is the main purpose of an emergency fund?
What is the main purpose of an emergency fund?
Which factor does NOT influence an individual's risk tolerance when selecting investments?
Which factor does NOT influence an individual's risk tolerance when selecting investments?
What is the primary characteristic of capital preservation investments?
What is the primary characteristic of capital preservation investments?
What is the significance of asset allocation in investment planning?
What is the significance of asset allocation in investment planning?
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Which type of investment is typically considered the most volatile?
Which type of investment is typically considered the most volatile?
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What should individuals do in response to major life events that alter their financial plans?
What should individuals do in response to major life events that alter their financial plans?
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What does the term 'liquidity' refer to in investment choices?
What does the term 'liquidity' refer to in investment choices?
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How do medium-term financial goals differ from long-term financial goals?
How do medium-term financial goals differ from long-term financial goals?
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What is the main purpose of Net Present Value (NPV) in investment decisions?
What is the main purpose of Net Present Value (NPV) in investment decisions?
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Which website is known for providing light-hearted financial advice and activities for starting an investment program?
Which website is known for providing light-hearted financial advice and activities for starting an investment program?
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What can be said about the Internal Rate of Return (IRR)?
What can be said about the Internal Rate of Return (IRR)?
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What does compounding refer to in the context of the Time Value of Money (TVM)?
What does compounding refer to in the context of the Time Value of Money (TVM)?
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Which of the following sources would provide information on current price information for shares and bonds?
Which of the following sources would provide information on current price information for shares and bonds?
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In financial planning, what does the term 'Present Value' refer to?
In financial planning, what does the term 'Present Value' refer to?
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What would indicate that a project is worth undertaking according to NPV criteria?
What would indicate that a project is worth undertaking according to NPV criteria?
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Which of the following is NOT a benefit of using professional advisory services in investing?
Which of the following is NOT a benefit of using professional advisory services in investing?
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What is the primary benefit of investing in mutual funds?
What is the primary benefit of investing in mutual funds?
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Which type of stock is characterized by a market capitalization of over $10 billion?
Which type of stock is characterized by a market capitalization of over $10 billion?
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How is the rate of return calculated?
How is the rate of return calculated?
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What is a characteristic of speculative investments?
What is a characteristic of speculative investments?
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Which investment fund type provides the highest potential return?
Which investment fund type provides the highest potential return?
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What is essential for individuals to consider when building an investment portfolio?
What is essential for individuals to consider when building an investment portfolio?
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What is the primary objective of investing in blue chip stocks?
What is the primary objective of investing in blue chip stocks?
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Which option is not a method of achieving instant diversification?
Which option is not a method of achieving instant diversification?
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Study Notes
MGST 217 Final Exam Study Notes
-
Ratios:
- Current ratio: Current assets/Current Liabilities (higher is better, measures short-term debt paying ability)
- Profit Margin: Net income/Sales (higher is better, measures profitability)
- Total Debt Ratio: Total Liabilities/total assets (lower is better, measures debt leverage)
- Asset turnover: Net Sales/Total Assets (higher is better, measures efficiency)
Excel Functions
- =PMT(rate, nper, pv, [fv]): Calculates total payment per period (effective interest rate).
- =PPMT(rate, per, nper, pv, [fv]): Computes the principal paid this period.
- =IPMT(rate, per, nper, pv, [fv]): Determines interest paid this period.
- PV(rate, nper, pmt, [fv]): Finds present value (used for annuities or equal sums)
- =FV(rate, nper, pmt): Calculates future value of an investment.
- =RATE(nper, pmt, pv, [fv]): Finds the interest rate per period
- =NPV(rate, values): Calculates the Net Present Value (for uneven sums; positive NPV is good)
- IRR(values): Determines Internal Rate of Return (when NPV = 0; higher than discount rate is ideal for investment)
- =NPER(rate, pmt, pv, [fv]): Finds the number of payments needed for an investment
- =IF(logical_test, [value_if_true], [value_if_false]): Used to apply taxes based on EBT.
- =SUMPRODUCT(array1, array2, ...): Calculates sum of products of corresponding ranges
Excel Errors
- #REF: Occurs when a formula refers to an invalid cell.
Effective Interest Rate Per Period
- APR/Number of payment periods per year (e.g., R2, Coefficient of determination and goodness of fit)
Goal Seek
- Set cell: Has a formula, cell containing desired value
- Changing cell: Always a number
- Breakeven: When profit = 0
Scenario Manager
- Result Cell is always a formula
- Changing Cell cannot be a formula
VLOOKUP
- =VLOOKUP(lookup_value, table_array, col_index_num) (table array must be ascending; TRUE/1 for approximate match, FALSE/0 for exact match)
Data Analytics/Digital Analytics
- Collection, measurement, analysis, visualization, and interpretation of digital data. Applicable/helpful to websites, mobile sites, and apps.
- Used to track user behavior, customer experience, and optimize ROI.
Financial Ratios
- Liquidity ratio, profit margin, total debt ratio, asset turnover.
Five Types of Risk:
- Environmental: Due to impact from the environment
- Political and Economic: Due to political/economic environment
- Credit: Exposure to loss from financial transaction
- Market: Exposure to volatility in the market
- Operational: Problems with operations
Data Analysis Presentation Principles:
- Be simple, clear, concise, and blatantly obvious
- Understand data, use suitable analysis, and match to the data type
Chart Types and Purposes:
- Pie: Shows parts of a whole
- Bar Graph: Compares two or more items.
- Line Graph: Shows changes over time
- Histogram: Shows frequency distribution
- Scatter Plot: Shows correlation
Important Considerations when Communicating Data:
- Convey results/insights, clear labels, key numbers, trends
- Avoid crowded/unfiltered data, unsupported information, and assumptions without stating them
Effective Recommendations:
- Provide a recommendation based on data
- Start with the conclusion and use strong, confident words
- Explain how the data supports the recommendation
Database Operations:
- Scrubbing the Database: Process of removing/fixing orphan records
- Database Data Retrieval: Retrieving data through queries (structured or by example)
- Data Integrity: Preserves data consistency, accuracy, accessibility
- Data Redundancy: Eliminates unnecessary repetition of data to improve efficiency.
Finance and Investments:
- Managing Personal Finances: Setting Short-, Medium-, and Long-term financial goals, controlling finances, and preparing for emergencies.
- Investment Alternatives: Bank accounts, Money market accounts, Term deposits, Guaranteed Investment Certificates, Income Investments (Government/Corporate bonds), Shares/Stocks, Growth Investments (shares in companies, diversified stock portfolios), Mutual Funds (pool funds from many investors to invest in a variety of securities and ETFs).
- Understanding Investment Returns: Determining rates of return, and risks in investing
Financial Functions and Excel:
- Time Value of Money (TVM): Present Value vs. Future Value, interest, compounding, discounting, and relationships.
- Net Present Value (NPV) in Excel: Calculating NPV from uneven cash flows
- Internal Rate of Return (IRR) in Excel: Finding the interest rate where NPV=0 -Determining feasibility of project investment
- Anatomy of a Loan: -Monthly payments, Effective Rate, calculations in Excel (PMT, IPMT, PPMT)
- Amortization Tables: Shows total payment (interest vs. principal)
- Effective Interest Rate vs. Annual Interest Rate: Understanding compounding periods (Yearly vs. Monthly)
- Compounding: -compounding interest more frequently than annually, Nominal Interest Rate -(APR)
Database Structure:
- Entity-Relationship Diagrams (ERDs): Visual representation of database structure
- Fields (Columns): Characteristics of item
- Records (Rows): Single items in the collection
- Tables (Files): Collections of related items.
- Primary Keys: Unique identifiers within a table.
- Foreign Keys: Links in another table.
- Compound Keys: Primary keys made up of two or more attributes
Additional Topics:
- Data visualizations
- Presentation best practices
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Description
Prepare for your MGST 217 Final Exam with these essential study notes. This quiz covers key financial ratios and Excel functions critical for analyzing financial health and investment value. Test your understanding and ensure you're ready for exam day.
