Finance AI Prompt Cheatsheet

Build a 5-year DCF model for a SaaS company with $10M ARR, 80% gross margin, and 25% annual growth. Use a WACC of 10% and a terminal growth rate of 3%. Show the equity value per share and a sensitivity table for WACC (8–12%) vs terminal growth (2–4%).

Run a comparable company analysis for a mid-market software firm. Show EV/EBITDA, EV/Revenue, and P/E multiples in a peer table, derive implied valuation ranges, and flag any outliers. Include a commentary paragraph on why the target deserves a premium or discount.

Calculate WACC for a company with 60% equity, 40% debt, beta of 1.2, risk-free rate 4.5%, equity risk premium 5.5%, and pre-tax cost of debt 6%. Show each component and the blended WACC, then recalculate for a 0.8x and 1.6x beta scenario.

Perform a sum-of-the-parts valuation for a diversified financial services company with three segments: retail banking, asset management, and insurance. Apply segment-appropriate multiples, show a SOTP bridge from total enterprise value to equity value, and flag the most sensitive assumption.

Model a leveraged buyout for a $50M EBITDA target at 8x entry multiple, financed 60% with debt at SOFR+350 bps. Run a 5-year hold with 15% EBITDA growth per year. Show the IRR and MOIC at 6x, 7x, and 8x exit multiples. Identify the key value driver.

Build a football field valuation chart using five methodologies: 52-week trading range, precedent transaction multiples, comparable company multiples, DCF base case, and DCF upside case. Display implied equity value ranges for each method and overlay the current offer price to show the premium or discount.

Run a reverse DCF for a stock trading at $85 with 200M diluted shares, $500M net debt, and $120M current FCF. What perpetual FCF growth rate does the current price imply at a 9% WACC? Is that rate achievable given the industry's historical median of 4%? What price would a 5% growth assumption imply?

Value an expansion option for a mining company: the right to invest $200M in Year 3 to double production capacity. Use Black-Scholes with an underlying asset value of $180M, volatility 35%, risk-free rate 4.5%, and 3-year expiry. Compare to a static NPV analysis that ignores optionality and quantify the option's contribution to total value.

Analyze precedent transactions for a healthcare IT acquisition. Given five comps with EV/EBITDA multiples of 14x, 16x, 12x, 18x, and 15x, calculate the mean, median, and 25th/75th percentile. Apply each to a target with $30M EBITDA and identify which deal is the strongest comp and why.

Value a mature utility company using the Gordon Growth Model: FCF next year $150M, cost of equity 7.5%, sustainable growth rate 2%. Show the intrinsic value, then run sensitivity across growth rates of 1%, 1.5%, 2%, 2.5%, and 3%. At what growth rate does a reasonable equity value become unsupportable?

Calculate the modified duration and convexity of a 5-year 4% coupon bond priced at par. Then estimate the price change for a 100 bps parallel shift up, using both first-order (duration only) and second-order (duration + convexity) approximations. Show the error from ignoring convexity.

Bootstrap the spot rate curve from the following par yields: 2Y=4.0%, 5Y=4.3%, 10Y=4.6%, 30Y=4.9%. Derive the 1-year forward rates at each tenor. Explain whether the curve shape implies a steepener or flattener trade and which position would benefit from a recession scenario.

Explain Z-spread vs OAS for an MBS and a callable investment-grade corporate bond. For a bond with a Z-spread of 180 bps and OAS of 120 bps, what does the 60 bps difference represent? When should a portfolio manager use each metric for relative value analysis?

Build a key rate duration profile for a 10-year bullet corporate bond and a 3s-10s-30s barbell portfolio. Show which portfolio has more curvature exposure. Recommend a hedging overlay using Treasury futures to neutralize the barbell's 10Y KRD position.

Analyze a 5% coupon convertible bond with $1,000 par, conversion ratio of 40 shares, current stock price $22. Calculate the conversion premium, parity value, and investment value. What delta does the converts desk use to hedge, and how does it change as the stock rises to $28?

Analyze an on-the-run vs off-the-run 10Y Treasury spread of 4 bps. Model the P&L from a long OTR / short on-the-run trade financed in repo. Given a 3-month carry assumption and 4 bps roll-down, what is the breakeven holding period before a liquidity event collapses the spread?

Build a 2s10s curve steepener trade using Treasury futures. 2Y yield: 4.8%, 10Y yield: 4.5%. Size the trade so that a 25 bps steepening generates $250K P&L. Show DV01 per contract, the notional required for each leg, and the carry cost over a 6-month hold.

Model prepayment speeds for a $500M FNMA MBS at 200 PSA, 300 PSA, and 400 PSA. Show the weighted average life for each scenario. If the current market rate is 6.5% and the pool coupon is 5.5%, predict which PSA scenario is most likely and calculate the resulting OAS at a price of $95.50.

Decompose a 180 bps IG corporate credit spread into default risk, recovery uncertainty, and liquidity premium. Given a 0.4% annual default probability and 40% recovery rate, what is the pure default component? How much is liquidity if CDS trades 20 bps tighter than bonds?

Design an interest rate swap overlay for a $200M pension portfolio with liability duration 14 years and asset duration 6 years. Calculate the notional of receive-fixed swaps needed to close the duration gap by 80%. Show the DV01 match and net P&L if rates fall 50 bps.

Calculate 1-day 99% VaR for a $10M portfolio with equal weights in three assets with daily volatilities 1.2%, 0.8%, and 1.5% and pairwise correlations of 0.5, 0.3, and 0.4. Use the parametric variance-covariance method. Then run a stressed VaR using double the correlations.

Explain the difference between historical simulation VaR, parametric VaR, and Monte Carlo VaR. For a bond portfolio with embedded optionality, which method is most appropriate and why? What are the backtesting requirements under Basel III?

Run a credit VaR calculation for a 10-bond portfolio with par value $1M each, average default probability 2%, average recovery rate 40%, and average asset correlation 0.15. Show both the expected loss and the 99.9% unexpected loss using the Vasicek single-factor model.

Design a stress test for an interest rate trading book. Include: 300 bps parallel shift up, 200 bps flattening, 150 bps steepening, and a negative rate scenario. Show P&L impact by bucket and identify which scenario produces the maximum loss. Recommend hedges to cap the tail loss.

Compare Expected Shortfall (CVaR) to VaR for a portfolio with fat-tailed returns. Given a 95% VaR of $500K and a return distribution with excess kurtosis of 3, estimate the ES at 95% confidence. Why do regulators prefer ES over VaR under FRTB?

Run a 10,000-path Monte Carlo VaR for a 5-position equity portfolio assuming multivariate normal returns. Show 1-day 99% VaR, 10-day 99% VaR (scaling by √10), and explain when the square-root-of-time assumption breaks down for portfolios with nonlinear exposures.

Calculate CVA for a 5-year interest rate swap with $100M notional where the counterparty has a 1.5% annual default probability and 40% recovery rate. Assume a flat yield curve at 5% and current MTM of $2.5M in our favor. Show the CVA haircut and impact on all-in swap cost.

Calculate the LCR and NSFR for a bank with: HQLA $500M (Level 1: $400M, Level 2A: $100M), total net cash outflows over 30 days $420M, available stable funding $900M, and required stable funding $780M. Are both ratios above the regulatory minimum? Which is the binding constraint?

Apply 2008 GFC stress parameters to a mixed portfolio: equities -40%, IG credit spreads +300 bps, HY spreads +800 bps, rates -150 bps, USD/EUR +20%. Show P&L for a portfolio with $50M equities, $30M IG bonds (duration 5), $20M HY bonds (duration 4), and a $10M long EUR/USD position.

Calculate delta, gamma, theta, vega, and rho for an at-the-money call: stock $100, strike $100, vol 25%, time 90 days, risk-free 4.5%. Show how delta changes as the stock moves to $95, $105, and $115. Design a delta-gamma neutral hedge using the underlying and a second option with a different strike.

Perform a variance analysis for a SaaS company that budgeted $5M revenue but actuals came in at $4.2M. Break down the gap into price, volume, and mix variance. Identify the top three root causes and draft three action items for the CFO's Q3 operating review.

Build a 12-month rolling cash flow forecast for a manufacturing company with $50M in quarterly revenue, 45-day DSO, 60-day DPO, and $8M capex annually. Identify the peak borrowing month and recommend a revolver sizing. Show covenant headroom under a 20% revenue decline.

Create a three-statement model (P&L, balance sheet, cash flow) for a retail company from these assumptions: $100M revenue growing 8% annually, 35% gross margin, 20% SG&A, 3% capex, 30-day working capital cycle. Verify the balance sheet balances and show year-3 free cash flow.

Design a driver-based forecast model for a subscription business. Identify the five key operating metrics, explain how each flows into revenue and EBITDA, and build a scenario analysis showing Base, Bull (+20% net adds), and Bear (-15% churn) outcomes for year-end ARR.

Write an executive commentary for a Q2 earnings miss where revenue fell 8% below plan due to customer delays in EMEA. Explain the variance in three concise paragraphs: what happened, why it happened, and the remediation plan. Keep it under 250 words for board distribution.

Build a zero-based budget for an IT cost center with $8M in current spend across headcount, software licenses, infrastructure, and professional services. Justify every line from zero, rank activities by business criticality, and identify at least $1.5M in potential cuts without impairing core operations.

Build a waterfall bridge from prior-year EBITDA of $85M to current-year EBITDA of $92M. Decompose the $7M improvement into: volume growth, price/mix improvement, cost efficiencies, FX impact, and M&A contribution. Format as a board-ready table with a narrative explanation of the biggest driver.

Design a CFO KPI dashboard for a B2B SaaS company. List the 12 most important metrics across ARR, growth, unit economics, and cash. For each metric, specify the numerator, denominator, target threshold, RAG status logic, and frequency of reporting. Include one leading indicator for early churn detection.

Build a headcount cost model for a 200-person company with average salary $95K. Include employer payroll taxes (7.65%), benefits loading (22%), and annual merit increases of 4%. Show fully-loaded cost per FTE, total people cost, and the incremental cost of 10 new hires in Q3 pro-rated from July.

Decompose $120M of annual revenue into organic vs inorganic growth. The company acquired two companies: Acq A (closed Jan, $15M ARR) and Acq B (closed Jul, $8M ARR). Prior-year revenue was $100M. Calculate organic growth rate, inorganic contribution, and pro-forma revenue as if both acquisitions were owned for the full year.

Write a credit memo for a $30M revolving credit facility request from a B2B SaaS company with $40M ARR, net revenue retention 118%, $5M EBITDA, $20M gross debt, and $8M cash. Include credit strengths, risks, and a recommendation with covenant package.

Analyze this covenant package: leverage ratio ≤ 4.0x, interest coverage ≥ 2.5x, minimum liquidity $5M, capex basket $3M/year. Model covenant headroom under a downside scenario where EBITDA drops 30%. Identify which covenant trips first and by how much.

Calculate the Altman Z-score for a company with working capital $2M, total assets $20M, retained earnings $4M, EBIT $3M, market cap $8M, book liabilities $12M, and revenue $18M. Classify the credit risk and recommend an internal rating. Compare to original Altman thresholds.

Compare investment-grade vs high-yield covenant packages. What protections does an IG issuer forgo that an HY issuer must include? Explain maintenance covenants vs incurrence covenants, and give examples of when each type matters most in a downturn.

Assess the credit risk of a commercial real estate loan: $25M office building, LTV 65%, DSCR 1.35x, occupancy 88%, lease WALT 4.2 years. Identify the top three risks, calculate break-even occupancy at current debt terms, and recommend structural mitigants for the loan agreement.

Price a leveraged loan for a $200M B+ rated issuer: SOFR floor 50 bps, spread SOFR+400 bps, 99 OID, 12-month soft-call at 101. Calculate the all-in yield to maturity at par and at 99. How does the OID affect the effective spread vs stated spread? Compare to a similar HY bond at 8.5% yield.

Build a recovery waterfall for a distressed company with $300M enterprise value and this capital structure: $100M first-lien term loan, $80M second-lien notes, $60M mezzanine, $120M equity. Show recovery rates for each tranche, identify the fulcrum security, and explain which tranche controls the restructuring.

Analyze a mezzanine financing: $50M at 12% cash pay + 3% PIK, with warrants covering 5% equity at a $300M enterprise value. Calculate blended IRR assuming full cash pay at a $400M Year 5 exit, and a PIK toggle scenario (3 years PIK, 2 years cash pay). Which is better for the lender?

Analyze debt capacity for a company with $40M EBITDA. Given lender constraints of 4.5x total leverage, 2.0x fixed charge coverage, and minimum $5M liquidity, what is the maximum senior debt? If the company wants a $10M revolver undrawn at closing, what term loan amount is achievable?

Advise a BB-rated issuer on whether to finance $300M via a leveraged term loan or a high-yield bond. Compare: all-in cost, covenant flexibility, prepayment optionality, investor base, execution timeline, and market conditions. In a rising rate environment, which instrument is preferable and why?

Calculate Scope 1, 2, and 3 emissions for a manufacturing company with: 500 tonnes diesel (Scope 1), 2,000 MWh electricity from a grid with 0.4 kg CO2e/kWh (Scope 2), and $5M in purchased goods with an industry emission factor of 0.3 kg CO2e per dollar (Scope 3, Category 1). Show in tCO2e.

Screen the following vendor list against OFAC SDN criteria: identify any potential matches and explain the match logic. For each hit, provide a risk score (Low/Medium/High), recommended action (pass, block, escalate), and the regulatory basis for the determination.

Draft a CSRD ESRS E1 climate disclosure for a mid-size European bank. Include: Scope 1–3 emissions baseline, transition plan milestones, physical risk exposure (acute and chronic), and financed emissions methodology using the PCAF standard. Flag any data gaps before mandatory reporting.

Explain the FRTB Standardised Approach vs Internal Model Approach for a trading book with interest rate, equity, and FX positions. What are the capital multipliers under SA vs IMA? At what trading desk size does switching to IMA become economically justified?

Classify a green bond framework under the ICMA Green Bond Principles. Evaluate use of proceeds, project evaluation criteria, management of proceeds, and reporting commitments. Identify gaps versus current market expectations and suggest specific language to address each gap.

Perform a TCFD scenario analysis for a cement producer under IEA Net Zero by 2050 (1.5°C) and Stated Policies (2.7°C) scenarios. Quantify transition risks (carbon price exposure on $200M EBITDA at $80/tonne CO2) and physical risks (water stress in key plants). Show the financial impact under each scenario.

Write an enhanced due diligence memo for a new corporate customer operating in a high-risk jurisdiction. Cover: beneficial ownership verification (UBO ≥25%), source of funds, adverse media, PEP screening, and sanctions exposure. Include a risk rating (Low/Medium/High) and conditions for account approval.

Draft a Suspicious Activity Report narrative for: a customer with a $50K annual salary who made 12 cash deposits of $9,800 each over 30 days, then wired $115K to a foreign account with no documented business purpose. Include subject description, suspicious activity description, and structuring red flags cited.

Classify a new PE fund under SFDR: it targets renewable energy investments with a binding Paris-aligned commitment but no minimum sustainable investment percentage. Is this Article 6, 8, or 9? Draft the required pre-contractual disclosure language and list the PAI indicators that must be reported.

Design an impact measurement framework for a $500M social bond funding affordable housing. Select three IRIS+ metrics, define the measurement methodology for each, set baselines and targets, and explain how the issuer reports impact annually to bondholders. Include a third-party verification governance mechanism.

Quantify revenue synergies from a software M&A deal where the acquirer has 800 enterprise customers and the target has 400 with 30% overlap. Estimate cross-sell synergies assuming 20% penetration of the acquirer's product into the target's non-overlapping base at $50K ACV. Build a phased 3-year ramp and NPV at 12% discount rate.

Build a merger accretion/dilution model. Acquirer: $5 EPS, 100M shares, P/E 18x. Target: $2 EPS, 40M shares, $48 acquisition price. Deal is 50% cash (5% cost) / 50% stock. Show EPS impact in Year 1 with $30M pre-tax synergies. Is the deal accretive or dilutive?

Draft a purchase price allocation for a $200M acquisition with tangible book value $80M and $120M of identified intangibles: customer relationships (15-year life), technology IP (7-year life), trade names (indefinite life). Show the goodwill remaining and year-1 amortization schedule.

Analyze a $100M earn-out tied to Year 2 EBITDA: 25% payout at $15M, 50% at $18M, 100% at $22M, linear interpolation between. Seller's projection: $20M. What is the expected earn-out value? How should the acquirer account for this under ASC 805?

Perform a QoE analysis for an acquisition target. Identify the five most common EBITDA-inflating adjustments: one-time items, owner compensation, related-party transactions, aggressive revenue recognition, and non-recurring capex. Draft a QoE adjustment table and calculate normalized EBITDA.

Draft the key conclusions of a fairness opinion for a buyout at $42/share. The target's 52-week range is $28–$39, DCF implies $38–$46, comps imply $35–$44, and precedents imply $40–$48. Is the offer price fair to shareholders? Identify which methodology provides most support and which constrains it most.

Compare full-ratchet vs broad-based weighted average anti-dilution for a Series B investor owning 20% at $10/share. The company raises a down round at $6/share with 5M new shares. Show post-round ownership for the Series B under each provision and explain which is more founder-friendly.

Model a SPAC merger where the target is valued at $800M pre-money. The SPAC trust has $300M, the PIPE is $200M at $10/share, and 40% of public shareholders redeem. Show pro-forma enterprise value, shares outstanding, sponsor promote dilution (20% founder shares), and the implied ownership table post-close.

Assess rep and warranty insurance for a $150M M&A deal. Typical coverage: 10–20% of EV, retention 1%, premium 3–4% of coverage. What is the seller's benefit? What is excluded (fraud, known issues)? How does R&W insurance affect indemnity escrow sizing? Draft the key negotiation points.

Design a 100-day post-merger integration plan for a $200M software acquisition focused on cost synergies. Identify five workstreams (technology, people, finance, go-to-market, legal), assign an owner to each, set Week 30 and Day 100 milestones, and build a synergy tracking dashboard showing realized vs projected cost saves monthly.

Design a 13-week cash flow forecast for a mid-size company with $50M in monthly payroll, $80M in quarterly tax payments, and a $200M revolver with a springing covenant at 25% availability. Show weekly ending cash, revolver draws, and covenant headroom. Flag the highest-risk weeks.

Calculate the cost of a cross-currency basis swap to fund EUR 50M using USD. The EUR/USD basis swap spread is -25 bps. Show the all-in EUR cost if USD funding is SOFR+85 bps and EUR/USD spot is 1.08. How does this compare to issuing a EUR bond at EURIBOR+90 bps?

Assess FX transaction exposure for a US company with EUR 30M receivables due in 90 days and EUR 15M payables due in 60 days. Calculate the net exposure, recommend a hedging strategy using FX forwards, and show the break-even spot rate at which the hedge destroys value.

Run a working capital optimization analysis. DSO is 58 days (industry: 42 days), DPO is 35 days (industry: 48 days), DIO is 72 days (industry: 60 days). Calculate the cash conversion cycle gap versus peers and quantify cash released from a 10-day DSO improvement on $500M revenue.

Model the repricing risk of a bank's deposit book. Fixed-rate deposits: $500M at 1.5%, maturing 6 months. SOFR-indexed loans: $400M at SOFR+200 bps. Current SOFR: 5.3%. If SOFR falls 75 bps over 6 months, calculate the NII impact. What hedging instrument neutralizes this?

Value a pay-fixed interest rate swap: $100M notional, 5-year tenor, pay 4.5% fixed, receive SOFR. Current market rate for the remaining 4-year tenor is 4.2%. Calculate MTM value. If rates fall to 3.8%, by how much does MTM move? Show DV01 and PV01 of the position.

Design a jet fuel hedging program for an airline with $800M annual fuel spend at $2.20/gallon. Hedge 50% of next 12-month exposure using a collar (cap 15% above spot, floor 10% below spot). Show collar cost, effective fuel range, and P&L at $1.90, $2.20, and $2.60 market prices.

Compare notional pooling vs physical cash pooling for a multinational with 8 subsidiaries across USD, EUR, and GBP. Show how notional pooling eliminates overdraft interest without moving cash vs physical sweeping. Identify which structure is optimal given a 5% USD borrowing cost and regulatory restrictions on cross-border cash in China.

Analyze LIBOR-to-SOFR transition on a $200M floating-rate loan originally at 3M LIBOR+200 bps. The replacement uses SOFR+213 bps (ARRC hardwired fallback). Calculate the economic difference in the first reset period if 3M SOFR is 5.30% vs the old LIBOR would have been 5.45%. Show the total payment difference on $200M.

Rationalize a company's banking relationships: currently 12 banks across operating accounts, credit facilities, FX, and custody. Build a scoring matrix using fee cost, credit capacity, FX pricing, digital capability, and relationship depth. Recommend consolidating to 4 core banks and estimate annual fee savings from consolidation.

Calculate IBNR reserves using the chain-ladder method. Given cumulative paid losses: AY2021 [$1.2M, $2.1M, $2.6M, $2.8M], AY2022 [$1.5M, $2.4M, $2.9M], AY2023 [$1.7M, $2.8M], AY2024 [$1.9M]. Project ultimate losses and calculate IBNR for each accident year.

Explain the CSM roll-forward under IFRS 17. Starting CSM: $500M. New business: +$80M. Interest accretion at 4%. Experience variance: -$15M unfavorable. Pattern release: -$45M. Show closing CSM and explain how each line flows through P&L under the GMM approach.

Calculate the Solvency II SCR for a life insurer. Longevity SCR: $100M, expense SCR: $40M, lapse SCR: $60M. Correlations: longevity-expense 0.25, longevity-lapse 0.25, expense-lapse 0.50. Show the combined life underwriting SCR using the correlation matrix.

Price a catastrophe bond for Florida hurricane risk: attachment probability 2%, exhaustion probability 0.5%, expected loss 1.2%/year. If investor-required spread is EL × 3.5x, what coupon over risk-free should the sponsor offer? How does the price change if EL rises to 1.8%?

Run an LDI analysis for a defined benefit pension: $500M PV of liabilities, duration 15 years. Fund holds $300M in equities and $200M in IG bonds (duration 7 years). Calculate funded status sensitivity to a 100 bps rate drop and recommend a swap overlay to extend duration to 12 years.

Calculate embedded value for a life insurance block: adjusted net worth $300M, value of in-force $450M at an 8% risk discount rate. Estimate value of new business given APE $100M and VNB margin 12%. Show total EV and the implied P/EV multiple at a market cap of $900M.

Compare a 30% quota share vs XL excess of loss ($10M xs $5M per risk) for a property insurer with $100M written premium and $65M expected losses. Show ceded premium, ceded losses, and net loss ratio. Which provides better protection against cat aggregation? Under which do retained earnings grow faster in a benign year?

Compare mortality tables (2012 IAM vs 2019 CSO) for pricing a 20-year term life policy for a 45-year-old male. Calculate the pure premium per $1M coverage for each table and explain the actuarial margin. If actual mortality improves 15% relative to the 2012 table, what is the reserve release benefit for a $500M block?

Design an optimal asset allocation for a P&C insurer with $2B investment portfolio: liability duration 4 years, required yield 4.5%, regulatory cap of 15% equities and 10% alternatives. Show a target portfolio across IG bonds, government bonds, equities, and real assets with duration match and expected yield.

Run a Bornhuetter-Ferguson reserve analysis for a liability line with 3 accident years. AY1: $12M paid, $18M ELR ultimate. AY2: $8M paid, $20M ELR ultimate. AY3: $3M paid, $22M ELR ultimate. Development factors: AY1=1.10, AY2=1.35, AY3=1.75. Show B-F IBNR for each year and compare to the chain-ladder result.

Test cointegration between two energy stocks using the Engle-Granger two-step test. If the ADF test on residuals gives a t-stat of -3.8 (critical value -3.4 at 5%), is the pair cointegrated? Estimate the hedge ratio using OLS. Given a current spread z-score of +2.1, build the entry/exit logic and expected Sharpe ratio assuming mean-reversion in 15 days.

Perform a Fama-French 5-factor attribution for a $500M equity fund with monthly excess return 0.85%. Loadings: market beta 1.05, SMB 0.30, HML -0.10, RMW 0.20, CMA 0.05. Factor premiums: Rm-Rf 0.6%, SMB 0.2%, HML -0.1%, RMW 0.3%, CMA 0.1%. Calculate alpha and the t-stat required to confirm skill.

Price a down-and-out barrier call: spot $100, strike $100, barrier $85, vol 20%, risk-free 4%, 1-year expiry. Compare to a plain vanilla Black-Scholes call. What is the probability of the barrier being breached? How does the price change if the barrier moves to $90? Use a binomial tree with 100 steps.

Fit an Ornstein-Uhlenbeck process to a spread series. Given OU parameters: long-run mean 0, speed of mean reversion κ=0.8, annual vol σ=0.15, calculate the half-life of the spread in days. Is a 5-day half-life tradeable given bid-ask costs of 2 bps? Build the trading rule for entry at ±2σ and exit at 0.

Backtest a 12-month/1-month momentum strategy on a 500-stock universe from 2010–2020. Report annualized return, Sharpe ratio, max drawdown, and monthly turnover. Evaluate statistical significance using a Newey-West adjusted t-test. Identify the two calendar months where the strategy consistently loses money and explain the seasonality.

Compare MOIC vs IRR optimization for a 5-year hold. Deal A: 3.5x MOIC, exit Year 5. Deal B: 2.8x MOIC, exit Year 3 (same capital deployed). Which has the higher IRR? Calculate both IRRs. In a fund context, which metric matters more for GP carry? At what reinvestment rate does Deal A become superior to Deal B on total fund basis?

Build a PE fund waterfall. Fund size: $500M. Total distributions: $950M. Structure: return of capital, then 8% preferred return compounded annually over 6 years, then 100% GP catch-up to 20% carry, then 80/20 LP/GP split. Calculate GP carry, LP net return, and TVPI. Show each waterfall step.

Model management fee and carry economics for a $1B buyout fund. Fee: 2% on committed capital years 1–5, then 1.5% on invested capital. Carry: 20% above 8% hurdle with catch-up. Assuming 2.2x MOIC over 6 years, calculate total management fees, total carry, net LP IRR, and gross-to-net fee drag.

Draft the key economic terms for an LP co-investment in a $50M deal alongside a PE fund. Negotiate: co-invest fee (0% vs fund's 2%), carry (0% vs fund's 20%), pro-rata follow-on rights, information rights, board observer seat, and tag-along / drag-along provisions. Explain why co-investments are LP-favorable economically but GP-favorable on deal execution.

Build a value creation plan for a PE-owned industrial company: $40M EBITDA at entry, $80M EBITDA target at exit (5-year hold, 10x exit multiple). Decompose the required $40M EBITDA improvement across four levers: organic revenue growth, margin expansion, bolt-on acquisitions, and operational efficiency. Set a Year 1 and Year 3 milestone for each lever with a named responsible executive.

Draft an equity initiation note for a mid-cap SaaS company: $800M market cap, $200M revenue growing 22% YoY, 78% gross margin, Rule of 40 score 45. Include: investment thesis (3 bullets), valuation (EV/Revenue vs 5 closest comps), key risks, and a 12-month price target using a 6x forward revenue multiple.

Analyze this earnings release: revenue $1.2B (consensus $1.18B, beat), EPS $2.15 (consensus $2.20, miss), gross margin 42% (down 150bps YoY), guidance raised for revenue but maintained for EPS. Write a same-day analyst take: what drove the margin compression, is the guidance divergence a red flag, and how should the stock react?

Screen a comparable company set for a specialty industrial manufacturer ($1.5B revenue, 18% EBITDA margin). Select 6 public comps on revenue scale, end-market exposure, and margin profile. Build a trading comp table with EV/EBITDA, EV/Revenue, and P/E — flag any comp trading as an outlier and explain why it should be excluded or weighted down.

Stress-test a long thesis on a consumer retail stock premised on margin expansion from supply chain automation. What are the three strongest bear-case counterarguments? For each, identify the specific data point (next earnings call metric or disclosure) that would confirm or kill the bear case, and set a stop-loss level tied to thesis invalidation, not just price.