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Fundamentals of Finance & Economics Exam - Cheatsheet

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Section 1

Fundamentals of Finance & Economics Exam - Cheatsheet

STUDY GUIDE

๐ŸŽ“ Fundamentals of Finance & Economics Exam - Study Guide

๐Ÿ“‹ Course Structure

๐Ÿ“– Chapter 1: Key Concepts in Finance and Investment Analysis

What this chapter covers:

๐Ÿ”‘ Essential Concepts & Applications

๐Ÿ› ๏ธ Problem Solving

Problem Type A: ROI Calculation

Problem Type B: NPV Calculation

โš ๏ธ

โŒ Mistake 1: Forgetting to account for the initial investment in NPV calculations.

โŒ Mistake 2: Using simple interest instead of compound interest when calculating future value.

๐Ÿ“– Chapter 2: Capital and Financial Markets: Stocks and Bonds

What this chapter covers:

๐Ÿ”‘ Essential Concepts & Applications

๐Ÿ› ๏ธ Problem Solving

Problem Type A: Calculating Equity Percentage

Problem Type B: Bond Pricing and Interest Rates

โš ๏ธ

โŒ Mistake 1: Confusing stocks and bonds.

โŒ Mistake 2: Ignoring the impact of interest rates on bond prices.

๐Ÿ“– Chapter 3: Business Strategy and Financial Documents

What this chapter covers:

๐Ÿ”‘ Essential Concepts & Applications

๐Ÿ› ๏ธ Problem Solving

Problem Type A: SWOT Analysis Application

Problem Type B: BCG Matrix Classification

โš ๏ธ

โŒ Mistake 1: Confusing internal and external factors in SWOT analysis.

โŒ Mistake 2: Misinterpreting the BCG matrix quadrants.

๐Ÿ“– Chapter 4: Analyzing Financial Statements

What this chapter covers:

๐Ÿ”‘ Essential Concepts & Applications

๐Ÿ› ๏ธ Problem Solving

Problem Type A: Ratio Calculation and Interpretation

Problem Type B: Horizontal Analysis

โš ๏ธ

โŒ Mistake 1: Using incorrect formulas for ratio calculations.

โŒ Mistake 2: Failing to interpret the meaning of ratios.

๐Ÿ“– Chapter 5: Capital Budgeting

What this chapter covers:

๐Ÿ”‘ Essential Concepts & Applications

๐Ÿ› ๏ธ Problem Solving

Problem Type A: Payback Period Calculation

Problem Type B: NPV Calculation

โš ๏ธ

โŒ Mistake 1: Ignoring the time value of money when using the payback period.

โŒ Mistake 2: Using an incorrect discount rate in NPV calculations.

๐Ÿ“– Chapter 6: Macroeconomics

What this chapter covers:

๐Ÿ”‘ Essential Concepts & Applications

๐Ÿ› ๏ธ Problem Solving

Problem Type A: GDP Calculation

Problem Type B: Identifying Types of Unemployment

โš ๏ธ

โŒ Mistake 1: Confusing nominal GDP and real GDP.

โŒ Mistake 2: Misunderstanding the effects of fiscal and monetary policy.

๐Ÿ“– Chapter 7: ESG (Environmental, Social, and Governance)

What this chapter covers:

๐Ÿ”‘ Essential Concepts & Applications

๐Ÿ› ๏ธ Problem Solving

Problem Type A: Assessing ESG Performance

Problem Type B: Incorporating ESG into Business Operations

โš ๏ธ

โŒ Mistake 1: Viewing ESG as solely a compliance issue.

โŒ Mistake 2: Failing to measure and track ESG performance.

๐Ÿ“– Chapter 8: Portfolio Construction and Diversification

What this chapter covers:

๐Ÿ”‘ Essential Concepts & Applications

๐Ÿ› ๏ธ Problem Solving

Problem Type A: Portfolio Diversification

Problem Type B: Risk Measurement

โš ๏ธ

โŒ Mistake 1: Failing to diversify across different asset classes.

โŒ Mistake 2: Misinterpreting standard deviation as the only measure of risk.

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