With the exam rapidly approaching and the need to squash the last bits of information in your head, perhaps there are some easy mnemonics or memory techniques that people have out there for recalling (sometimes complex) information quickly? I find these go-to devices really helpful during the pressure of an exam.
I’ll start with one:
Type 2 Error: F ailing to reject a F alse null
You can remember this is Type 2 error since there are 2 F’s…
In PM they also mention the way to memorize important aspects to cover in an IPS: R-R-T-T-L-L-U (return, risk, tax, time horizon, legal restriction, liquidity, unique constraints).
Here is mine:
Call up, Put down .
This means we excercise the call option when stock price is up (i.e. higher than the strike price) and put option wh stock price is down (i.e. lower than the strike price)
Kurtosis: Leptokurtic, Normal, Platyurtic. L N P (London N Paris)
Yields in order of magnitude: MMY, BEY, EAY. M B E (Member of British Empire)
Dividend Payments chronology dates: Declaration, Ex-dividend, Holder of Record, Payment. D E H P (Dell competing with HP)
Porter’s five forces: Rivalry amongst existing competition, New entrants, Buyers bargaining, Suppliers bargaining, Substitutes. R N B S S ( RnB SuperStar)
Put call parity: S+P=C+K/(i+rfr)t. S P C K (SiP a CoKe)
Sometimes a picture paints a thousand words: for options, I tried memorizing those awful max/min formulas, but I realized the payoff graphs were far easier to understand and use!!