TABLE OF CONTENTS: I.CHAPTER 1 : ETHICS II.CHAPTER 2 : QUANTITATIVE METHODS III.CHAPTER 3 : ECONOMICS IV.CHAPTER 4 : FINANCIAL ANALYSIS TECHNIQUE V.CHAPTER 5 : CORPORATE FINANCE VI.CHAPTER 6 : PORTOLIO ANALYSIS VII.CHAPTER 7 : EQUITY INV. VIII.CHAPTER 8 : FIXED INCOME INV. IX.CHAPTER 9 : DERIVATIVES X.CHAPTER 10: ALTERNATIVE INV.

ETHICS

QUANT. METHODS 1. TIME VALUE of MONEY CONCEPT A. Terminology: Compound interest / interest on interest (konsep riba – hadeeh) Timelines: discounting vs compounding PV (Present Value) FV (Future Value) compounding discounting Interest rate = required rate of return = discount rates = opportunity cost

QUANT. METHODS B. Real Risk-Free Rate, Nominal Risk-Free Rate, and Real Rate of Return Real risk-free rate = theoretical rate that has no expected inflation on it Nominal risk free rate = rate on T-Bills / SBI (includes expected inflation) Real Rate of Return = required rate of return on securities / rate that is stated on a bond / time deposit that includes additional risk calculation. Relationships: Nominal risk free rate = real risk-free rate + expected inflation rate Real Rate of Return = nominal risk free rate + default risk premium + liquidity premium + maturity risk premium Whereas: -Default risk = risk of bond/security holder for not making the promised regular payment (coupons/dividends) or the notional amount at the end of tenure. -Liquidity risk = risk of receiving less than fair value if we want to sell it for cash quickly. -Maturity risk = a kind of specific default risk for bonds (debt securities) only. maturityrisk

QUANT. METHODS C. Effective Annual Rate = annual rate of return actually being earned after adjustment have been made for different compounding periods. = necessary when comparing investments that have different compounding periods. It allows for an apple-to-apple rate comparison. Formula: EAR = (1 + periodic rate) m – 1 Example 1: Compute EAR if the stated annual rate is 12%, compounded quarterly Answer:

QUANT. METHODS Example 2: Example 3:

QUANT. METHODS D. Present Value, Future Value, and Annuities Formula: FV = PV ( 1 + I/Y) n  PV = ….. (tinggal dibalik) Annuities = dibagi 2: ordinary & annuity due (akan berbeda cara menghitungnya) = harus menggunakan kalkulator = lihat contoh untuk lebih mudahnya. PV of a perpetuity (infinite annuities) = PMT / (I/Y) Example 1:

QUANT. METHODS Example 2: Example 3:

QUANT. METHODS Example 4: Example 5:

QUANT. METHODS 2. DISCOUNTED CASH FLOW APPLICATION A. Net Present Value (NPV) Dijumlahkan, NPV > i = 10% Pertanyaan umum yang dapat dijawab oleh NPV: - Apakah proyek saya ini menguntungkan dengan asumsi required rate of return sebesar i (mis = 10%) - Reject sebuah project jika NPV < 0 Hal yang harus diperhatikan dalam menghitung NPV: - i atau required rate of return harus diketahui terlebih dahulu - Projected cash flow harus diketahui. Hal ini bisa melalui asumsi ataupun perkiraan pemasukan / pengeluaran output hasil proyek nantinya.

QUANT. METHODS 2. DISCOUNTED CASH FLOW APPLICATION B. Internal Rate of Return (IRR) Dijumlahkan, NPV = i = ??? Pertanyaan umum yang dapat dijawab oleh NPV: - Dengan projected cash flow setiap tahun sebesar sekian, berapakah IRR saya? - Apakah IRR saya > dari required rate of return (atau dengan kata lain: lebih baik mengerjakan proyek ini ataukah menempatkan resource saya ditempat lain yang lebih menguntungkan?) Hal yang harus diperhatikan dalam menghitung NPV: -NPV = 0 - Projected cash flow harus diketahui. Hal ini bisa melalui asumsi ataupun perkiraan pemasukan / pengeluaran output hasil proyek nantinya.

QUANT. METHODS D. Holding Period Return (HPR), Money-Weighted Return, and Time-Weighted Rate of Return C. Project Decision Rule Dengan asumsi bahwa proyek-proyek yang ada bersifat mutual exclusive, pilih yang mana? : Project A: Project B: NPV IRR Project C:Project D: 50 mio 20%21% 60 mio100 mio 10% 20 mio 50% PROJECT C i. HPR = biasa juga disebut growth rate HPR = P 1 /P 0 – 1 atau (P 1 +D 1 )/P 0 – 1 ii. Money-Weighted Return : PV inflow = PV outflow Formula = menggunakan rumus Geometric Mean Return Perhitungan mirip dengan IRR, tapi perhatikan cash inflow & outflow per periode iii. Time-Weighted Rate of Return = measures of compound growth R G = [(1+R 1 ) (1+R 2 ) …….. (1+R n )] 1/n -1

QUANT. METHODS D. Bank Discount Yield (BDY), Holding Period Yield (HPY), Effective Annual Yield (EAY), Money Market Yield (MMY), and Bond Equivalent Yield (BEY) i. HPY = HPR (sama Rumusnya) iii. EAY = EAR (sama rumusnya) ii. Bank Discount Yield: r BD = D/F x 360/t D = discounted value F = face value t = time to maturity EAY = (1+HPY)] 365/t -1  Artinya EAY: HPY yang disetahunkan (HPY/year) iv. Money Market Yield (r MM ) or CD equivalent yield r MM = 360/t x HPYr MM = [360 x r BD ] / [360 – (t x r BD )] or HPY = (1+EAY)] t/ or v. Bond Equivalent Yield r BY = 365/t x HPR or r BY = 2 x semi-annual yield How? 1.Find the HPY for semi-annual period 2.Times 2 from the result you got above BDY < MMY < BEY

QUANT. METHODS 3. STATISTICAL CONCEPTS & MARKET RETURNS

QUANT. METHODS 4. PROBABILITY CONCEPTS

QUANT. METHODS 5. COMMON PROBABILITY DISTRIBUTIONS

QUANT. METHODS 6. SAMPLING AND ESTIMATION

QUANT. METHODS 7. HYPOTHESIS TESTING

QUANT. METHODS 8. TECHNICAL ANALYSIS