Contents Learning Outcome Statements (LOS) Reading 31: Introduction to Corporate Governance and Other ESG Considerations Exam Focus Module 31.1: Stakeholder Management Module 31.2: Factors Affecting Corporate Governance Key Concepts Answer Key for Module Quizzes Reading 32: Capital Budgeting Exam Focus Module 32.1: Capital Projects, NPV, and IRR Module 32.2: Payback Period, Project Rankings Key Concepts Answer Key for Module Quizzes Reading 33: Cost of Capital Exam Focus Module 33.1: Weighted Average Cost of Capital Module 33.2: Project Cost of Capital Key Concepts Answer Key for Module Quizzes Reading 34: Measures of Leverage Exam Focus Module 34.1: Measures of Leverage Key Concepts Answer Key for Module Quiz Reading 35: Working Capital Management Exam Focus Module 35.1: Working Capital Management Key Concepts Answer Key for Module Quiz Topic Assessment: Corporate Finance Topic Assessment Answers: Corporate Finance Reading 36: Market Organization and Structure Exam Focus Module 36.1: Markets, Assets, and Intermediaries Module 36.2: Positions and Leverage Module 36.3: Order Execution and Validity Key Concepts Answer Key for Module Quizzes 10 Reading 37: Security Market Indexes Exam Focus Module 37.1: Index Weighting Methods Module 37.2: Uses and Types of Indexes Key Concepts Answer Key for Module Quizzes 11 Reading 38: Market Efficiency Exam Focus Module 38.1: Market Efficiency 12 13 14 15 16 17 18 19 20 21 Key Concepts Answer Key for Module Quiz Reading 39: Overview of Equity Securities Exam Focus Module 39.1: Types of Equity Investments Module 39.2: Foreign Equities and Equity Risk Key Concepts Answer Key for Module Quizzes Reading 40: Introduction to Industry and Company Analysis Exam Focus Module 40.1: Industry Analysis Module 40.2: Pricing Power and Company Analysis Key Concepts Answer Key for Module Quizzes Reading 41: Equity Valuation: Concepts and Basic Tools Exam Focus Module 41.1: Dividends, Splits, and Repurchases Module 41.2: Dividend Discount Models Module 41.3: Relative Valuation Measures Key Concepts Answer Key for Module Quizzes Topic Assessment: Equity Investments Topic Assessment Answers: Equity Investments Reading 42: Fixed-Income Securities: Defining Elements Exam Focus Module 42.1: Bond Indentures, Regulation, and Taxation Module 42.2: Bond Cash Flows and Contingencies Key Concepts Answer Key for Module Quizzes Reading 43: Fixed-Income Markets: Issuance, Trading, and Funding Exam Focus Module 43.1: Types of Bonds and Issuers Module 43.2: Corporate Debt and Funding Alternatives Key Concepts Answer Key for Module Quizzes Reading 44: Introduction to Fixed-Income Valuation Exam Focus Module 44.1: Bond Valuation and Yield to Maturity Module 44.2: Spot Rates and Accrued Interest Module 44.3: Yield Measures Module 44.4: Yield Curves Module 44.5: Yield Spreads Key Concepts Answer Key for Module Quizzes Reading 45: Introduction to Asset-Backed Securities Exam Focus Module 45.1: Structure of Mortgage-Backed Securities Module 45.2: Prepayment Risk and Non-Mortgage-Backed ABS Key Concepts Answer Key for Module Quizzes Reading 46: Understanding Fixed-Income Risk and Return 22 23 24 25 26 27 Exam Focus Module 46.1: Sources of Returns, Duration Module 46.2: Interest Rate Risk and Money Duration Module 46.3: Convexity and Yield Volatility Key Concepts Answer Key for Module Quizzes Reading 47: Fundamentals of Credit Analysis Exam Focus Module 47.1: Credit Risk and Bond Ratings Module 47.2: Evaluating Credit Quality Key Concepts Answer Key for Module Quizzes Topic Assessment: Fixed Income Topic Assessment Answers: Fixed Income Appendix Formulas Copyright List of Pages 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 vii viii ix x xi xii xiii xiv 10 11 12 13 14 15 16 17 18 19 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 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40 ... risks as that is a money-losing proposition Insurance companies mitigate this conflict by imposing underwriting standards for the policies they will issue and by continuing to work only with agents... firm have an interest preserving an ongoing relationship with the firm, in the profitability of their trade with the firm, and in the growth and ongoing stability of the firm As they are typically