Finance Questions:

$1)$ Explain Howard Marks' view on what is risk and what it's not?

$2)$ What does it mean when someone says "everything is a DCF$"?$

$3)$ How would you solve bond math?

$4)$ What are all aspects of CME, and how would you come up with reasonable estimates for equities and USTs?

$-$ How would you incorporate macro data and Business Cycle Theory?

$5)$ How do we use CME to forecast asset class returns for equities, UST, Investment Grade, High Yield, Equity Risk Premium, and Country Risk Premium

$6)$ How do we use Moneychimp stock predictor? What are the key inputs and what do they say? Also, how do you apply the concepts it utilizes

$7)$ What is your favorite version of the "Inefficient Frontier" $?$

$8)$ What are the characteristics of a normal distribution $($the percentage $\%$ of observations within $1,2,3,$ standard deviations$)?$

$-$ What are all aspects of Mean$-$Variance Optimization and Modern Portfolio Theory? What are all their pros and cons?

$-$ What are correlations and their pros$/$cons$?$

$-$ Explain the significance and your understanding of the Monte Carlo simulation?

$-$ Explain the significance and your understanding of the Perfect Portfolio?

$-$ What is the significance of Risk Parity?

$-$ Explain the significance and your understanding of the Yale Model?

$-$ Explain all $9$ asset classes we discussed throughout the semester

$-$ How do we achieve the optimal Asset Allocation? Explain the difference between academic finance and practical finance?

$-$ How do we outsource asset allocation, and what are its pros$/$cons $?$

$9)$ What's the significance of;

$-$ Liquidity?

$-$ Time Horizon?

$-$ Taxes?

$-$ Tactical Asset Allocation?

$-$ Behavioral Biases?

$10)$ What are the benefits of fixed income?

$11)$ What does Duration measure? Why is it important and how does it apply back to the statement, "everything is a DCF$"?$

$12)$ How were TIPs? What do they represent and why are they important?

$13)$ How are Break$-$Even Rates calculated? What do they represent and how do we apply them?

$14)$ Why might T$-$Bills also offer somewhat of a real rate? What is the thought process in arguing they might?

$15)$ What should an investor expect to earn in REAL terms on T$-$Bills $($cash$)$ and why?

$16)$ What are all of the Hedge Fund strategies?

$17)$ What are the pros and cons of buying a mutual fund with the duration of a $5$ year UST vs buying a $5$ year UST?

$18)$ What are the tax consequences of owning TIPs vs a regular UST?

$19)$ How would we model Fixed Income returns?

$20)$ How do we look at the various shapes of UST curves and explain their shapes?

$21)$ What is the role of equities in a portfolio?

$22)$ Do equities offer a better hedge against inflation than USTs? Why or why not?

$23)$ How do the cash flows of an equity valuation differ from a UST?

$24)$ What is the 'free rider' problem? Do you agree with the logic?

$25)$ Describe rationales for equity investment across the passive$-$

active spectrum?

$26)$ Explain the significance of risk parity and leverage. What was the rationale behind risk parity, how is leverage used?

$-$ What are the risks?

$27)$ What's the significance behind the impact of leverage on returns and risk $($standard deviation$)?$

$-$ Is leverage a free lunch to boost returns?

$28)$ Explain the teeter$-$totter concept between Boring$/$Steady vs Dynamic!$/$Tactical$?$

$29)$ How can historical correlations between asset classes be applied in formulating current asset allocation decisions $($if at all$)?$

$30)$ Are the asset class returns between $2009-2023$ an advertisement for the benefits of diversified asset allocation or an indication that active management has the potential to do much better if you can pick the winning asset classes over the next few years? How would you go about picking the winning asset classes?

$31)$ Explain these statements:

$-"$An investment is a lump sum payment for a future cash flow"

$-$ "Prices actually change based on how the future actually transpires"

$-$ "The market will discount some picture of the future"

$-$ "everyone knows that everyone knows the Fed is going to cuts rates, we should buy REITs"

$32)$ What is the All$-$Weather strategy and its goals?

$33)$ Why do people say "you cannot eat sharpe ratios?" What does this mean and why does it matter?

$34)$ Where are we currently, what assets should we favor as a result and why? Same question for the economic cycle in regards to equities. Explain how your response to the inflation sector relates to the equity sectors you favor

$35)$ In regards to Economic Regime Allocation and Target Portfolios, is this like $$baking$?$ Do we just need to follow the recipe? What is the potential problem with this?

$36)$ Explain all Asset Allocation Strategies:

DC Strategies

$60/40$

The Glidepath

Smart Beta $/$ Factors

Heuristics $(110-$ age$)$

Risk Tolerance

The Endowment Model

The DB model of contractual liabilities

The Permanent Portfolio

Risk Parity

The All Weather Portfolio