CFA III terms

Maybe because English is not my native language, I found the Level III terms rather interesting, yet heard to remember clearly. hedonic editing ebullience cycle Bayesian rigidity

and also, ceteris paribus… sign

Cognitive Dissonance …


intestate probate

can you please also write its description. That would help here to other for review

Just came across the best one yet: Crack Spread.

and this one: Meat Grinder effect

hedonic editing - practice of choosing frames that are attractive relative to other frames ebullience cycle – trading activity peaks during uptrend markets (investors impatient to receive portfolio performance reports – to see how well they have fared over the last period) and avoid performance statements during down markets when their positions have performed poorly. They even leave the letters unopened (unopened envelope syndrome) Bayesian rigidity – analyst stays too close to his previous estimates. They cling on to them despite new information being made available. ceteris paribus - all else equal cognitive dissonance - disparity between ability and perception of ability to forecast a value intestate - if the deseased leaves no will or if the will is deemed invalid, deceased is said to have died intestate probate - legal process that determines the validity of descendent’s will meat grinder effect - process of breaking down a big size trade into smaller lot sizes to minimize the impact cost and be able to trade it more cost effectively crack spread - The spread created in oil commodity market by purchasing oil futures and offsetting the position by selling gasoline and heating oil futures. used when more than one output (gasoline and heating oil) can be created from one input (oil).

good thread. “House money” is another one I can think of.

house money effect - an individual’s risk tolerance increases when he starts with an initial gain position (i.e. experience with past events influence risk tolerance levels for an individual) and risk tolerance is less when he starts with an initial loss position.

level3… you are on fire today. way to go.

I dont think crack spread and house money effect are the terms reflected in this years’ los? correct me if I am wrong … there are other financial terms that not appear in lvl3 though, i.e. naked call, naked put, make you feel like some sort of erotic service provider. LOL

ndzhai - Crack Spread yes.

house mone effect is covered in cfa text (SS-3)

level3aspirant YOU ARE THE KING

bayesian ridigity sounds suspiciously the same as the achoring and adjustment bias to me. Does anyone know the difference?

yes … they are very similar indeed. not adjusting forecasts in the face of newly available information.

idiosyncratic variable