FIN MODELS EXAM # 2
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Created by:
thepenprevails on March 28, 2011
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22 terms
Terms | Definitions |
|---|---|
 r-squared | coefficient of determination- tells us the proportion of total variation in the dependent variable explained by the independent variable |
| 80 | An r-squared proportion greater than ____ % is considered a good fit |
| T-stat | tells you whether coefficient is significantly different from 0. |
| 2 | A t-stat greater than _ tells us that coefficient was able to be estimated with a fair amount of accuracy |
| alpha | coefficient of the intercept |
| beta | coefficient of the variable |
| more, less, opposite | A beta that is greater than 1 means portfolio swings_____ agressively than the market, while a beta that is less than 1 means it swings _____ aggressively than the market. However, a negative beta means it moves _________ of the market |
| TREND | use the _______ function in Excel to predict sales (if a " in sales exists) |
| fixed costs | costs that are constant regardless of quantity produced, over some relevant range of production |
| variable costs | costs expected to change at same rate as firms' sales. Constant per unit |
| break-even point | level of sales that gives 0 profits |
| interest payments | Regarding leverage analysis and DFL, fixed _______ ________ drive leverage |
| operating costs | Regarding leverage analysis and DOL,fixed _______ _______ drive leverage |
| pure discount | with a _______ ________ loan, you would pay back all interest & principal at due date |
| interest only | with an _______ _______ loan, you would pay interest each year & principal at due date |
| amortized | with an _________ loan, you would pay principal & interest in installments, much like a mortgage/car pmt |
| fundamentals of valuation | according to the ________ ___ _________, one would attach the value to an asset by PV of future cash flow's |
| cash flows, fundamental value | According the the fundamentals of valuation, if their are no _____ ______, then their is no _______ _______ |
| zero coupon | ______ _______ bonds (esp. the lengthier) are most sensitive to interest rate changes |
| down | If a bonds YTM goes up, its bond price will go _____ |
| loss | If a bond matures at a premium, it will realize a _____ |
| yield | Re: yield curves, as time to maturity increases, so does a bond's _____ |
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