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Gross Domestic Product GDP. Gross National Product GNP. Measures total value of all the goods and services produced by a national economy. Components of GDP include. Most useful variation of GDP is. Real GDP which is GDP adjusted for inflation using constant dollars. Real GDP is considered the. Consumer Price Index CPI. Inflationary periods are typically characterized by. When interest charges increase, it causes. Equity securities provided the. Fixed income securities are. Inflation has two effects on bondholders.

Inflationary risk is also knows as.

Prolonged period of high rate of inflation at the same time as a high rate of unemployment. Repetitive succession of changes in economic activity ebb and flow. Cycle moves into the peak. Once in the trough cycle.

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Real GDP declines for two successive quarters six months. Real GDP declines for a prolonged period. Current Interest Rate - Rate of Inflation. Government's use of taxation and expenditure programs to sustain a stable, growing economy. Government increases its spending and cut taxes to stimulate demand.

Fiscal Policy during Inflation. Government cuts spending or increases taxes when there is too much demand. Emphasis on reducing taxes and the size of government to stimulate the economy.

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Definitions of the Money Supply. M1 M2 M3 L. Tools the Federal Reserve Board FRB uses: Rate at which banks can create new money by re-lending deposits and, in turn, creating new deposits. If a bank has excess reserves, then it may. Federal Funds Rate is.

Federal Open Market Committee FOMC. Purchase and sale of US government securities done through. Primary Government Dealers, banks and brokerage firms appointed by FRB. Reverse Repo matched sale. Securities Exchange Act of gave FRB power to determine amount of credit that could be extended to purchase securities Regulation T applies to brokerage firms and Regulation U to banks and all other lenders.

Changing the margin requirements is the. Feds try to influence bank lending policies through media and secondary stock market transactions are part of gnp. How money is created. The ability of financial intermediaries banks to attract deposits and in turn extend credit. Investors withdraw funds from banks and seek higher yielding investments elsewhere.

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Higher US interest rates compared to foreign yields results in a. Imports exceed exports Caused when US dollar is strong and foreign consumers won't be able to purchase US goods.

Important items for Fundamental Analysis. Items OWNED by the corporation Current, Fixed, Intangible. Cost of last item produced is applied to the price of the first item sold from inventory greater profit when prices falling. Cost of first item produced to the money received from the first item sold greater profit when prices rising.

Due in a year or more Bonds, Long-term loans. Shareholder's ownership interest Preferred Stock, Common Stock, Retained Earnings, Capital surplus. Amount of premium paid by shareholders above par value for shares sold to the public by the corporation.

Income Statement Profit and Loss statement. Sales - Operating Expenses day-to-day. EBIT - Bond Interest and Taxes.

Various Calculations for Fundamental Analysis. Ability to meet short-term debts and convert assets into cash Analyzed by calculating Secondary stock market transactions are part of gnp Working Capital, Current Ratio, Quick Asset Ratio, Cash asset ratio, Cash Flow. Total Current Assets - Total Stockbroker in chester Liabilities Needed to finance daily operations. Thus, the EPS decreases dilution.

Buying Equipment for Cash. Uses indexes, averages, theories, price trends, and charts to predict the direction of both overall market and specific stocks. The Dow Jones Etf trend trading options course. Broader measure of the market than the Dow Jones Avg.

The New York Stock Exchange Buy bhp shares Index.

Wilshire Associates Equity Index. Represents the dollar value of all stocks broadest of all indexes and averages. As the trading volume increases. Trying to profit by buying some securities while at the same time selling short others. Prices are moving in a certain direction and there is a high level of trading volume.

A pattern is expected to follow for the near future. Analyst recommend to buy securities. Analyst recommend to either sell existing postiions or to sell securities short. Amount of a company's shares of common stock that have been sold short and have not yet covered closed out. Bullish Signal Enter a buy stop order slightly above the resistance level. As price increase above resistance, order will be executed.

Alternative is for investors to purchase call options once the breakout has occured. Bearish Signal Sell short slightly below the support level. Done by entering a sell stop order below the support level Alternative would be to purchase put options on the stock. Head and Shoulders Pattern. Indicates a reversal of a trend - Head and shoulders top formation is bearish as it signifies the reversal of an upward trend - Either sell their existing position to avoid a large loss on the stock, or to profit by selling the stock short.

Inverted Head and Shoulders Head and Shoulders Bottom. Opposite of a Top, and is considered to be a bullish. The Random Walk Theory. Greatest return for a given amount of risk. Having asset classes that did not show a high degree of positive correlation produced the best results. Non-Diversifiable Risk is measured by. Beta for a portfolio is. All bonds are subject to.

Interest-rate risk Like beta is measurement for systematic risk of stocks, interest-rate risk is the systematic risk for bonds.

Duration or Modified Duration.