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Equity InvestmentsModule 1 of 6

Market Organization and Structure

7

Concepts

3

Formulas

1

Decisions

3

Quiz Questions

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Key Concepts

7 concepts covered in this module.

Financial System Functions

Achieve purposes: save, borrow, raise equity, manage risk, exchange assets, trade on information.

Asset Classifications

Securities (stocks, bonds), Currencies, Commodities, Real assets, Contracts (forwards, futures, options, swaps).

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Formulas

3 essential formulas for this module.

Leverage Ratio

Leverage = Asset Value / Equity Value

Where: Higher leverage = more risk and potential return

Margin Call Price

Pcall = P0 × (1 - Initial Margin) / (1 - Maintenance Margin)

Where: For long positions

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Decision Frameworks

1 decision frameworks to guide your analysis.

Market order vs Limit order?

  • Market: when speed of execution matters more than price
  • Limit: when price certainty matters more than speed

Mind Map

Visual overview of how concepts connect in this module.

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Financial System Functions

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Answer
Achieve purposes: save, borrow, raise equity, manage risk, exchange assets, trade on information.
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Security Market Indexes