CFA LEVEL 1 STUDY SESSION 01 ETHICAL 250.) - to smooth fluctuations - trends are easier to see larger n - _ (smoother/less smooth) line if overly long n - may obscure price trend (obscure = hide) ST average line crosses LT average line above - golden cross - _ (buy/sell) signal below - dead cross - _ (buy/sell) signal SMA (Simple Moving Average) vs. EMA (Exponential) (place more weigts on recent data) Bollinger bands e.g.: bollinger band (20,2) means 2 standard deviations above and below the 20-day moving average line viewed as contrarian indicator: if price at or above upper band - over_ (bought/sold) market - we should _ (buy/sell) Oscillators (dao ng) Momentum () oscillator (or Rate of Change oscillator) closing price today 2,4=corrective; 2=pullback Downward moves: 3 waves (A,B,C) (A=bulltrap) Downtrend: downward moves (5 waves); upward moves (3 waves) Size of waves correspond with Fibonacci ratios Fibonacci numbers 0,1,1,2,3,5,8,13,21. Golden ratio: 1.618 or 0.618 Price target can be 1.618 of the previous high Different waves Grand Supercycle (centuries) Supercycle Cycle Primary Intermediate Minor MinuteMinuette Sub-Minuette (few minutes) h. Intermarket analysis interrelationships (relative strength ratios) among Major asset classes: stocks, bonds, commodities, currencies Equity sectors/ industries International markets Floating Topic Page 22 CFA LEVEL 1 STUDY SESSION 04, 05 & 06 ECONOMICS Page 23 13. Demand And Supply Analysis: Introduction a. Types of markets Markets for factors of production Markets for services and finished goods Capital markets Demand and Supply b. Principles of demand and supply c,d. Demand & Supply Curves Shifts Movement along d. Process of aggregating e. Equilibria Stable Unstable f.g. Calculate and interpret Individual and aggregate inverse demand and supply functions Individual and aggregate demand and supply curves Amount of excess demand Amount of excess supply h. Types of auctions Winning price l. Calculate and interpret Consumer surplus Producer surplus Total surplus i. Causes of demand or supply imbalance j.k. Impact of govt regulation and intervention Effect of introduction and removal of a mkt interference m. Elasticity Price elasticity of demand Income elasticity Cross- price elasticity a Page 24 14. Demand And Supply Analysis: Consumer Demand a Consumer choice theory Consumer utility theory b.c. Use of Indifference curves Opportunity sets Budget constraints Calculate and interpret a budget constraint d. Consumers equilibrium bundle of goods e. Compare Substitution effects Income effects f. Distinguish normal goods inferior goods Explain Giffen goods Veblen goods a Page 25 If you want 2019 Kaplan CFA notes, practice exams, qbank, video, audio, Secret sauce, mock exam, flashcard, Wiley study guide, video, testbank, FinQuiz stuff please contact johnway168 15. Demand And Supply Analysis: The Firm a. Concepts Accounting profit Normal profit Economic profit b. Revenue Total revenue Average revenue Marginal revenue c. Factors of production d. Costs Total costs Average costs Marginal costs Fixed costs Variable costs e. Breakeven points Shutdown points f. Economies of scale Diseconomies of scale g. Determine profit-maximizing level of output h. Distinguish SR profit maximization LR profit maximization i. Distinguish Decreasing-cost industries Constant-cost Industries Increasing-cost industries j. Product of labor Total Marginal Average k.l. Diminishing marginal returns Profit-maximizing utilization level of an input Optimal combination of resources-Minimize cost a Page 26 16. The Firm And Market Structures a.b.c.d.e PERFECT COMPETITION MONOPOLISTIC COMPETITION OLIGOPOLY MONOPOLY f. Concentration measures Use Limitations g. Identify type of market structure a Page 27 17. Aggregate Output, Price, And Economic Growth GDP a. Calculate GDP using Expenditure approach Income approach b. Compare Sum-of-value-added method Value-of-final-output method c. Compare Nominal GDP Real GDP GDP deflator d. Compare GDP National income Personal income Personal disposable income e. Fundamental relationship among Saving Investment Fiscal balance Trade balance Aggregate Demand and Supply f. IS curve LM curve Aggregate demand curve g. Aggregate supply curve in SR LR h. Shifts and movements along D & S curves i. Fluctuations in aggregate D & S - SR changes in econ & biz cycle Economic growth j. Sources Measurement Sustainability k. Production function approach l. Components of economic growth Input growth Growth of total factor productivity a Page 28 18. Understanding Business Cycles Business cycle a. Describe Biz Cycle Phases of Biz Cycle b. Economy moving through biz Cycle - Inventory levels Labor Physical capital utilization levels c. Theories of Biz Cycle d. Unemployment Types Measures Inflation e. Explain Inflation Disinflation Deflation f. Indices used to measure inflation g. Inflation measures Uses Lim