CFA Level II Mnemonics

CFA Level II
#1

Hi All -

What are your mnemonics / quirks to remember unmemorable topics in the exam.

I only have some for QM so far:

Serial Correlation, Durbin Watson, Hansen - Some Cats Drink Water Happily

Heteroskedaskity, Breusch Pagan, Chi, White - Happy Boys Play Cards Well

Multicollinearity, Sig Fs, non sig Ts - MotherF’ing Tests

#2

Normally I like to picture models/formulae in terms of tables and diagrams. I also use mnemonics though.

Vivisection > Vmerger=Va+Vt+S-C

Icebrew > IR=IC x sqrtBR

Second > CF=(S-C-D)(1-t)+D

Coke=pepsi > c+ke=p+s

#3

DIP is to capitalise interest cost: NI + D epreciation + I nterest - lease P ayment

I think I stole this from someone on AF in previous years.

#4

Olinto had a pretty funny one for remembering the US GAAP requirement for recording a finance (capital) lease:

S N O T

S - Seventy Five percent of asset’s useful life

N - Ninety percent of the fair value of the leased asset (PV of lease payments)

O - Option to purchase at a bargain price

T - Transfer ownership at end of lease term

#5

I wish I had something to contribute to this threads awesomeness but thanks !

#6

SNOTS for IFRS

#7

Any more?

#8

If I can’t think of something caustic, I shurg and learn the actual material:

  • Serious Doobies, Watson
  • Little girl, “Hi, Gamma”. Grandma, “Dear, you’re at the money!”
  • The tragic tale of the socially repressed put writer, “PLEASE DON’T CALL!”
  • Wear a Call Cap. Put [something] on the Floor.
  • Convenience Yield = you have a cow. You hate it. It’s an indoor cow that sits everywhere in your house. Tragically, Exploding Cow syndrome strikes all the outdoor cows. You feel pleased at possessing a physical cow rather than a contract for a cow (that is likely now exploded).
#9

Porters 5 Forces:

Every Surfer Blazes Something Real

Entrants, Substitutes, Buyers, Suppliers, Rivals

#10

Foreign Exchange Arbitrage:

Up the beat Mixtape - Up the bid Multiply / down the offer divide

P.S: I don’t know if that counts :smiley:

#11

Fine, once when you reach the charter and given learnt synonymous, try to avoid such presenting to clients and expect that they will understand you.

Personally, I am not sure that I had ever been able to learn any knowledge studying in this manner but that’s only my opinion:)

#12

Post offer defense mechanisms = A colorful and leveraged jewel

(color= white knght, white squire, gree nmail, leveraged= leveraged buyout & recapitalization and jewel=crown jewel defense)

#13

Any more?

#14

For pension accounting

Change in plan assets (Ending - Beginning) = C harlie A in’t B ad = Contributions + Actual Returns - Benefits Paid

Change in PBO (Ending - Beginning) = S usan I s P retty A t B est = Service Cost + Interest Cost + Past Service Cost +/- Actuarial Loss/Gain - Benefits Paid

#15

Here are some FCFF/FCFE reminders that I found online. I fixed a mistake and added some own tricks:

  1. FCFF includes (-)Int(1-t) and FCFE includes (+)Net Borrowing. FCFE = FCFF - Int(1-t) + Net Borrowing

  2. Remember NI has another N (NCC) included. Note 5 terms in each and note that both Int(1-t) and Net Borrowing are respectively positive. FCFF = NI + NCC + Int(1-t) - FCInv - WCInv FCFE = NI + NCC + Net Borrowing - FCInv - WCInv

  3. EBIT has 4 letters so there are 4 terms. Remember you can only get FCFF from EBIT & EBITDA FCFF = EBIT(1-t) + Dep - FCInv - WCInv FCFF = EBITDA(1-t) + Dep(t) - FCInv - WCInv

  4. CFO has 3 letters so there are 3 terms. There’s an ‘F’ in CFO so remember it has (-)FCInv in the formula… Again, note that Int(1-t) and Net Borrowing are respectively positive. CFO = FCFF + Int(1-t) - FCInv CFO = FCFE + Net Borrowing - FCInv

  5. FCFE discounting using target debt ratio (DR) has all negative components in the formula. FCFE = NI - [(1 - DR) x (FCInv - Dep)] - [(1 - DR) x WCInv]

#16

I’m a bit late with this, but I don’t know if anyone here remembers the movie with Biggie Smalls in it. (Not the rapper the character he got his name from.). From the movie Let’s do it again with Bill Cosby. Biggie was a gangster. .

It always helped me with Inventory issues. (Assuming rising prices and inventory levels.)

IF, everything is Bigg, then CC smalls.

But, when your ILL, everything’s lil, so CC Biggs

Translation: When your inventory is FIFO (IF), every thing is big except CC smalls. COGS and CF are smaller.

But when your inventory is LIFO (ILL), every thing’s lil and CC Bigs ie. COGS and CF are big.

(If prices decline, the relationships reverse).

Call Bridgette = get the PeaS

Call+Bond = Put + Stock

(I didn’t really use peas, but that’s a more internet friendly term.):slight_smile:

#17

Purely for memorisation, no flaming…footy fan Revenue (Ruthless) Cogs (Cristiano) Gross Profit (Got) SG&A (Swag) Ebitda (Ends) Depreciation (Dirty) EBIT (Eto) tax operating income disclaimer