📊 Series 65 Investment Analysis Cheat Sheet

The Investment Analysis section of the Series 65 exam challenges candidates to apply quantitative and qualitative tools to evaluate securities, portfolios, and overall market conditions. This cheat sheet covers the most critical formulas, ratios, and analysis concepts you need to master for test day.

Use it to reinforce key points, streamline your review, and boost your performance in one of the exam’s most technical sections.

🧮 Key Formulas

• Total Return = (Ending Value – Beginning Value + Income) ÷ Beginning Value
• Current Yield = Annual Income ÷ Market Price
• Price-to-Earnings Ratio (P/E) = Market Price ÷ Earnings Per Share (EPS)
• Earnings Per Share (EPS) = Net Income – Preferred Dividends ÷ Number of Outstanding Shares
• Dividend Yield = Annual Dividend ÷ Market Price
• Beta = Sensitivity of a stock’s return relative to the market (Market beta = 1)
• Alpha = Actual Return – Expected Return (based on CAPM)
• Sharpe Ratio = (Return – Risk-Free Rate) ÷ Standard Deviation
• CAPM (Capital Asset Pricing Model) = Risk-Free Rate + Beta × (Market Return – Risk-Free Rate)

📈 Fundamental Analysis

• 🔍 Income Statement: Revenue, expenses, net income
• 🧾 Balance Sheet: Assets = Liabilities + Shareholder Equity
• 💵 Cash Flow Statement: Operating, investing, financing activities
• 📊 Profitability Ratios:
  • Return on Equity (ROE) = Net Income ÷ Shareholder Equity
  • Net Profit Margin = Net Income ÷ Revenue

📉 Technical Analysis

• 📍 Support and Resistance Levels: Identify buy/sell zones
• 🔁 Moving Averages: Track price trends (e.g., 50-day, 200-day MA)
• 🕳️ Head and Shoulders, Double Tops/Bottoms: Trend reversal patterns
• 📉 RSI (Relative Strength Index): Overbought (>70) or oversold (<30)
• 💹 MACD (Moving Average Convergence Divergence): Signal momentum shifts

💼 Portfolio Management Concepts

• ⚖️ Diversification: Reduces unsystematic risk
• 📉 Standard Deviation: Measures volatility
• 🧠 Modern Portfolio Theory (MPT): Optimal portfolios on the efficient frontier
• 📍 Efficient Market Hypothesis (EMH): Prices reflect all known information
• 💰 Dollar-Cost Averaging: Investing fixed amounts over time regardless of price

📌 Risk Types

• Systematic Risk: Market-wide (cannot be diversified away)
  • Interest rate risk, inflation risk, geopolitical risk
• Unsystematic Risk: Company/industry specific (can be diversified)
  • Business risk, financial risk, regulatory risk

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