Classical economist: economy move towards equilibrium at full capacity and employmentKeynesian : C + I + G + (X M ) = AD. Equilibrium achieved when value of current production equals planned aggregate expenditures. Inherently unstable as prone to booms and busts. Changes in demand magnified by multiplier cause wild swings in economy. Monetariests: fluctuations in money supply cause fluctuations in real economic output and major cause of inflation is excessive growth in money supply.

Supply of money in country: M1 : Cash in circulation, checking accounts (demand deposits), travelers checks , M2 : all M1, money market mutual funds, depts. In savings accounts, time dept of less than 100k

Monetary base = bank reserves + money in circulation

Interest rates: O/C of money. When I/R decreases, ppl more willing to hold money and when ir increase, ppl less willing to hold money.

Quantity theory of money: MV = PY. Long run, Y and velocity dont change and an increase in money supply will lead to increase in price level.Neutrality of money: In LR, real variables wont change.

Inflation: demand pull AD increase more than AS/ cost-push AS decrease due to increase in cost of pdtn.

Phillips curve: inverse relationship between unemployment and inflationNominal interest rates is the net result of inflation borrowers increase demand for funds since they want to borrow now compared to future and lenders reduce demand for funds as i/R too low to compensate for inflation risk.

Auto stabilisers: budget deficits increase ( decrease) in recessions (booms): corporate profits: progressive income taxes, unemployment insurance program

Open-end funds sell at nav ( current market value of ASSETS liabilities ) / no of shares outstanding. NAV usually below current market price because current value of funds assets higher than historical financial statements used in NAV calculation. plus any shareholder fees fund impose, cant be sold at secondary market whereas closed-end fund sells only at secondary market, price determined by supply and demand forces.

Investment strategies: Style value, look for stocks incoorctly priced given assets and earnings low p/e ratios, pay higher dividends/ growth focus on issuers future earnings potential, id stocks offering potential for growing earnings at above-average rates. Sector strategyIndex strategy: passive investing, lower mgt expenseGlobal: diversified portfolio from any country throughout the globeStable value: short term fixed income securities and guaranteed investment contracts issued by insurance coysDollar-cost averaging: investor commits to invest a fixed dollar amt on a regular basis. Value averaging

ETF are open end companies mirroring composition of standard indexes. Trade on a secondary market, redeemable in very large blocks. ETF are certificates that grant owenerhsip over part of a basket of individual stocks, trade at px that closely match underlying assets and unwind when investors no longer want them. Low fees compared to mutual funds, trade throughout the dayprices updated, dividends reinvested immediately. MAY be illiquid if light trading

Real estate calculation: Cost approach: replacement cost of building and landSales comparison: compare with similar real estates, may not have one that can be compared withIncome approach: perpetuity discount trype of model. Net income/ market req rate of return. Discounted after-tax cash flow approach

Formative stage financing: Angel investing idea stage to trans idea into biz plan and assess market potentialSeed stage supports pdt dev/mkting efforts like research, first stage VC investEarly stage: move into operation but before commercial production and salesLater stage: before ipo aft commercial production and salesMezzanine stage: IPO

Exit strategies for private equity: Trade sale: sale of coy to strategic buyer like a competitorIPO: portfolio coy selling its shares including some or all of those held by pte equity firms to public investors as to have potential for highest price, mgt approval, publicity for pte equity firm but high trans costs, long lead time , high disclosure reqRecapitalization: PEF maintains control. i/r lowPEF releverage and pay iself a div, prelude to later exitSecondary sales: sale to another pte equity firn/other invesotsLiquidation/write-offExhibit 13.Basic Forms of Real Estate Investments and ExamplesDebtEquity

Private Mortgages Construction lending Direct ownership of real estate. Ownership can be through, sole ownership, joint ventures, real estate limited partnerships, or other commingled funds.

Public Mortgage-backed securities (residential and commercial) Collateralized mortgage obligations Shares in real estate corporations Shares of real estate investment trusts

Limit order: instructions to a broker/exchange to obtain best price immed avail when filling order but in no event accept px higher than a specified limit when buying or accept a price lower than a specified price when sellingStop loss order: trader has a specified stop price condition