## FIN MODELS EXAM # 2

##### Created by:

thepenprevails  on March 28, 2011

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# FIN MODELS EXAM # 2

 r-squaredcoefficient of determination- tells us the proportion of total variation in the dependent variable explained by the independent variable
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#### 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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