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EduPristine>Blog>6 Steps to Score 70%+ in Equity

6 Steps to Score 70%+ in Equity

November 25, 2012

CFA Equity

source:teamboom

Dear CFA® Program Level I Candidate, With less than a week left to your exam date, we hope you are practicing questions and mock test keeping the Commandments and Sins in mind.

In this session, we will share with you the Commandments and Sins of Equity Investments.

  1. Remember that technical analysis is a direct violation of weak-form EMH and Fundamental analysis is a direct violation of semi-strong from EMH
  2. Concepts that need to be crystal clear before entering the exam hall: The difference in FCFE and FCFF and which discount rate is applicable under both of them is of utmost importance.
  3. Don’t forget to discount the terminal value while calculating the intrinsic value of a stock in the exam. This is a general mistake which students do.
  4. Never confuse between the required rate of return and the growth rate in the Gordon Growth Model Equation.
  5. The top-down approach is a method of valuation that begins with first analyzing the overall economy and then continuing to drill down to the specific analysis.
  6. Enterprise Value (EV) = Market Cap (of Equity) + Market Value of Debt – Cash and Cash Equivalents (including marketable securities)

We hope that the above points were useful for your preparation. We will send you such useful information before the exam. If you want to know about a particular topic please write to us at help@edupristine.com.

You can get some useful downloads for CFA exams. You can also buy some recordings for the topic of your choice on our page.

If you want to see what questions others are asking then please visit our forum.

Please feel free to write to us for any help regarding your CFA® exams.

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Trusted by Fortune 500 Companies and 10,000 Students from 40+ countries across the globe, it is one of the leading International Training providers for Finance Certifications like FRM®, CFA®, PRM®, Business Analytics, HR Analytics, Financial Modeling, and Operational Risk Modeling. EduPristine has conducted more than 500,000 man-hours of quality training in finance.

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