learned the market model today… looks bad, but only took about 20 minutes to commit to short term memory. this is prolly the last formula i will recognize. Expected return i= int+Beta (Return Market) Variance i= Beta i ^2 * Variance Market * error term variance ^2 Cov im= Beta i * Beta M * Variance Market was also VERY surprised to see at least 4 questions on the [sales= cash collection + increase in AR - increase deferred revenue] formula in CFAI text and also Core Operating Margin (Sales-COGS-SG&A/Sales) there were questions numerous times in CFAI but not really mentioned in as much in Schweez.
I came across the estimate of cash sales a number of times… but no… core op margin, not so much.
anyone know what the market model actually means/measures? also, how is core operating margin any differerent from operating margin (i.e. EBIT margin i.e. EBIT/Sales)
small correction: Variance i= Beta i ^2 * Variance Market * error term variance ^2 should be Variance i= Beta i ^2 * Variance Market + error term variance ^2 instead.
ooooooh you are so NASTY CP!!!
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