New User Special Price Expires in

Let's log you in.

Sign in with Facebook


Don't have a StudySoup account? Create one here!


Create a StudySoup account

Be part of our community, it's free to join!

Sign up with Facebook


Create your account
By creating an account you agree to StudySoup's terms and conditions and privacy policy

Already have a StudySoup account? Login here

FIN4504 -- Investments -- Chapter 4/5 Notes

by: Gabrielle Isgar

FIN4504 -- Investments -- Chapter 4/5 Notes FIN4504

Marketplace > Florida State University > Business > FIN4504 > FIN4504 Investments Chapter 4 5 Notes
Gabrielle Isgar
GPA 3.0

Preview These Notes for FREE

Get a free preview of these Notes, just enter your email below.

Unlock Preview
Unlock Preview

Preview these materials now for free

Why put in your email? Get access to more of this material and other relevant free materials for your school

View Preview

About this Document

Outline of the lecture notes for Chapters 4 and 5.
Dr. Doug Smith
Class Notes
25 ?




Popular in Investments

Popular in Business

This 18 page Class Notes was uploaded by Gabrielle Isgar on Tuesday January 26, 2016. The Class Notes belongs to FIN4504 at Florida State University taught by Dr. Doug Smith in Winter 2016. Since its upload, it has received 42 views. For similar materials see Investments in Business at Florida State University.


Reviews for FIN4504 -- Investments -- Chapter 4/5 Notes


Report this Material


What is Karma?


Karma is the currency of StudySoup.

You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!

Date Created: 01/26/16
Lecture Notes – 1/21 – Chapter 4 Chapter 4: Mutual Funds and Other Investment Companies Be familiar with: Closed and open end funds Commingled funds/REITs Net Asset Value Calculation Fee structure, operating expenses (costs of investing in mutual funds) HPR on mutual funds Definition of ETFs 4.1 Investment Companies Services of Investment Companies A Administration & Record Keeping o Tax purposes o Low cost reinvestment o Low cost additional investment, DCA o Low cost switching between fund families o Some funds may allow check writing privileges B Diversification o Low cost, instant diversification C Professional management o Lower research costs o Portfolio managed according to specific objectives o Professionals to find undervalued securities and/or engage in asset allocation strategies D Reduced transaction costs E Investing for retirement: Most funds can be set up as an IRA  Immediate advantages: o Administer and keep track of all of your investments in one location o Keeps track of all of your distributions both capital gains and dividends o Will allow you to easily reinvest any distributions o Allows for easy diversification o Difficult for small investors to do when buying securities on their own o Allows small investor to hold a fraction of a share in a company o Knowledgeable management of your portfolio o These managers generally have an MBA and plenty of experience trading securtiies o Economies of scare allow for reduced transaction costs 4.2 Types of Investment Companies Organizational Forms Unity Investment Trusts (UITs): unmanaged, fixed composition portfolios  Any interest and/or dividends are distributed immediately to trust certificate holders  Provide diversification within one sector or area and low cost entry  Often levered, rates of return can be extreme Lecture Notes – 1/21 – Chapter 4 Managed Investment Companies: managed, usually changing composition portfolio  More commonly known as a "mutual fund"  The fund's board of directors typically hires an investment advisor to select and manage the fund assets according to some specific goal(s) set by the board and any regulatory requirements  The investment advisor usually creates the fund and selects the investments. Most funds are of this type A managed investment company (mutual fund) may be: Open end -- shares are bought from the fund and redeemed by the fund Closed end -- shares are bought and sold among investors in the marketplace (NASDAQ or an exchange and the fund itself is not involved) Differences in Open & Closed End:  Most funds are open end:  The advantage of the open end form is  Liquidity for the investor  Fund's ability to grow (advantage for the fund or sponsor)  The disadvantage of the open end form is  The need to keep a cash reserve  Vulnerable to panics  For various reasons, actively managed mutual funds don't invest all the money at their disposal, but instead maintain cash balances of approximately 8% Other Investment Organizations Commingled funds -- partnerships of investors that pool their funds  Designed for trust or larger retirement accounts to get professional management for a fee  Operates similar to a mutual fund REITs -- similar to close end fund; invest in real estate and real estate loans  Equity trusts purchase real estate  Mortgage trusts invest in mortgage and construction loans Unit Trust -- fixed portfolio for the life of the fund, "unmanaged" portfolios Managed Investment Company -- a management team manages a portfolio for a fee Open-End -- this is the typical mutual fund an investor will buy  Here the fund issues or redeems shares at net asset value (NAV) o For this reason cannot trade during day o Put in order during day o At end of day buy or sell at NAV price Closed End -- funds trade like stocks on an exchange  Price can differ from NAV  Some trade at a premium and many trade at a discount Hedge Fund -- similar to mutual funds, but not registered and not subject to SEC regulations  Rich investors  Can pursue investment strategies that are not allowed for mutual funds Lecture Notes – 1/21 – Chapter 4  Similar to mutual funds, but not registered and not subject to SEC regulations  Available to institutional and high net worth investors  Can pursue investment strategies that are not allowed for mutual funds o Grew from about $50 billion in 1990 to about $2 trillion in 2008  Incentive fees may be as high as 20% of profits o Began dropping mid-2008 on due to credit crisis 4.3 Mutual Funds Net Asset Value Used as a basis for valuation of investment company shares  Selling new shares  Redeeming existing shares Calculation: NAV = (Market Value of Fund Assets - Fund Liabilities)/(Fund Shares Outstanding) o At the end of each day a NAV is calculated for the fund o In mutual funds, this is the value used to buy or sell your shares Open-End and Closed-End Funds: Key Differences Shares Outstanding Closed-end: no change unless new stock is offered Open-end: changes when new shares are sold or old shares are redeemed Pricing Open-end: Fund share price = Net Asset Value (NAV) Closed-end: Fund share price may trade at a premium or discount to NAV  Since closed end is like stock, cannot redeem, must sell to another investor  Can only increase shares outstanding by having a new issue of more shares How Funds are Sold Directly marketed:  You find them  May avoid from end load o Front end loan is an up front cost (fee) to purchase a share of a mutual fund  About 1/2 of funds are directly marketed Sales force distributed  Recommended by a broker or planner  Usually will have a front end load  May be revenue sharing on sales force distributed o Potential conflict of interest  Brokers put investors in funds that may not be the most appropriate  Mutual funds could direct trading to higher cost brokers Lecture Notes – 1/21 – Chapter 4  Revenue sharing is not illegal but it must be disclosed to the investor o Fund company pays the broker for preferential treatment when making investment recommendations Financial supermarkets  E.G., Charles Schwab  Avoid a direct load, but may cost you more in expenses  Low cost switching even between fund families and easier to interpret record keeping Funds & Investment Objectives Each mutual fund has a specified investment policy Money Market Fund -- invests in money market securities o Allows easy access to this market Fixed income -- invests in the fixed income sector Equity -- primarily in stocks. o Income funds (high dividend yields) o Growth (higher risk low yields) Balance and income -- try to act like a fund for an individuals entire portfolio (well rounded mix) Asset Allocation -- Similar to Balance and Income, but weigh sectors based on manager forecasts (riskier) Index Funds -- passively managed portfolio replicating an index Specialized sector funds -- industry or geography specific 1 Domestic Stock Funds a Aggressive growth i Sector, small cap growth, mid cap growth b Growth i Large cap growth b Growth & Income i Small, medium, large blend ii Small, medium, large value b Countercyclical i Bear Market Investment Characteristics  Focus on capital gains, low income  High turnover  Substantial potential for capital loss  Compatible Investor Goals  Long time horizon  Financial ability to remain in the markets  Ability to handle losses 1 Index Funds a Broad market b Industry or market sector c International market d Size subset Investment Characteristics Lecture Notes – 1/21 – Chapter 4  Goal is to duplicate the performance of an index or market sector  Low turnover, low expenses Compatible Investor Goals  Investors who believe in "efficient markets" and are seeking market returns with minimal expenses and turnover  Stock funds still require ability to handle risk and staying power 1 Balanced Funds a Allocation Funds i World, moderate, conservative ii Convertibles b Target Date Funds i Near term (to 2014), Intermediate (2015-2029) ii Long Term (2030+) Compatible Investor Goals  Intermediate to long time horizon  Willing to face higher tax liability  Some ability to handle losses Investment characteristics  Hold both stocks and bonds, allocations may vary over time  Turnover varies  Higher income, lower capital gains & lower potential for capital loss 1 Fixed Income Funds a Federal Government i Short, Intermediate, Long ii Inflation Protected b Corporate i Intermediate, Long ii High Yield, Multi-sector iii Emerging Markets, World iv Bank Loans Investment characteristics  Focus on income and current yield  Lower potential for capital loss; inflation risk higher Compatible Investor Goals  Short to moderate time horizon okay  Understand tax liability  Adds diversification, income and safety 1 International Stock Funds a Foreign i Size and Value/Growth b Global or World i Size and Value/Growth b Geographic region c Emerging market Investment characteristics  Risk varies, but can be high, FX exposure  Expense ratios can be high  Substantial potential for capital loss Lecture Notes – 1/21 – Chapter 4 Compatible Investor Goals  Longer time horizon  Investor seeking diversification and/or higher returns  Ability to remain in the markets & handle losses 1 Money Market Funds a Taxable b Tax Exempt Investment characteristics  Focus on safety of principal and income  Earn more than on bank accounts with little additional risk Compatible Investor Goals  Short time horizon  Add stability to a portfolio  Potentially large opportunity losses and inflation risk Trading Scandal with Mutual Funds Late trading -- allowing some investors to purchase or sell after NAV has been determined for the day Market timing -- allowing investors to buy or sell on stale net asset values  International: fund NAV may be based on prices in foreign markets which close at different times Net effect? Transfer wealth from existing owners to the new purchasers or sellers Potential Reforms  Strict 4:00 PM cutoff with late orders executed the following trading day  Fair value pricing with net asset values being adjusted for trading in open markets  Imposition of redemption fees on holdings < 1 week  Mutual fund board director must now be independent of fund sponsor 4.4 Costs of Investing in Mutual Funds Cost of Investing in Mutual Funds Fee Structure  Front-end load o A commission or sales charge paid when you buy into a fund o Generally given to the broker who sells the fund o "Rip-off"  Back-end load (contingent), (redemption fee) o Redemption or exit fee o These may be more useful since there are costs to all investors when investors cash out of the fund Operating expenses  Buying and selling commissions, administrative expenses and advisory fees for the managers 12 b-1 charges  Annual fees for marketing and distribution costs  Marketing costs paid by the fundholders  Alternative to a load, but assessed annually  Maximum is 1% of assets Lecture Notes – 1/21 – Chapter 4  These fees can have a huge effect on your annual returns o High fees generally lower returns Fees, loads and performance  Gross performance of load funds is statistically identical to gross performance of no load funds  Why pay a load charge? Harder to avoid than you might think  Funds with high expenses tend to be poorer performers o 12 b-1 chargers should be added to expense ratios  12 b-1 is increasingly prevalent o Costs found in the found prospectus and may be compared via Morningstar  Avoiding the load: o Can sometimes choose different class of fund shares  Best alternative may depend on amount invested and expected holding period Expense ratios  Funds charge annual operating expenses and annual advisory or management fees against the NAV o Expense ratios are calculated as Annual Expenses/Average NAV o A "well managed" fund probably should have an expense ratio of less than 2%  All costs and charges must be revealed in the fund's prospectus HPR on Mutual Funds HPR = (NAV SELL NAV BUY+ CG DIST Div DIST/NAV BUY  Dist = Distribution  HPR = Holding period return  All distributions are taxable, even if reinvested in the fund  Do not buy into a MF just before its distribution date (usually near the end of the year or quarter) 4.5 Taxation of Mutual Fund Income General Tax Rules  The fund itself is not taxed as long as o Fund meets certain diversification requirements o Fund distributes virtually all income earned (less fees and expenses) to fund shareholders  The investor is taxed on capital gain and dividend distributions at the investor's appropriate tax rate  Distribution requirements imply that portfolio turnover may affect an investor's tax liability Taxes and Mutual Funds  Investor directed portfolios can be structured to take advantage of taxes while mutual funds cannot  High turnover leads to greater tax liability  More disclosure on taxes was required in 2002  After-tax returns now reported in prospectus Lecture Notes – 1/21 – Chapter 4 o SEC rule requiring all mutual funds to state explicitly their after-tax returns in their prospectuses, starting February 15, 2002 Implications of Fund Turnover  The fund itself pays commission costs on purchases and sales of portfolio holdings, which are charged against NAV o These commissions are lower than what you and I pay o Total commission expenses are higher if the portfolio has higher turnover  The turnover rate is measured as the total asset value bought or sold in a year divided by the average total asset value 4.6 Exchange Traded Funds Exchange Traded Funds ETFs allow investors to trade index portfolios like shares of stock Examples: SPDRs and Diamonds, Cubes, WEBS Potential advantages:  Trade continuously throughout the day  Can be sold short or purchased on margin  Potentially lower taxes  No fund redemptions o Large investors can exchange their ETF shares for shares in the underlying portfolio  Lower costs (no marketing; lower fund expenses)  Taxes: o Mutual funds often must pay capital gains taxes when investors cash out of the fund since the fund must sell securities to payout to the investors o ETF shares are merely sold to another investor  Mutual Funds can limit this problem by putting on short-term trading expenses to minimize short-horizon investors in the fund  Less marketing = Less management fees  Potential disadvantages o Small deviations from NAV are possible o Must pay a brokerage commission to buy an ETF buy a no load index fund may be purchased online for no commission 4.7 Mutual Fund Investment Performance: A First Look First Look at Mutual Fund Performance  Evidence shows that average mutual fund performance is generally less than broad market performance  Evidence suggests that over certain horizons some persistence in positive performance  Evidence is not conclusive  Some inconsistencies 4.8 Information on Mutual Funds Lecture Notes – 1/21 – Chapter 4 Sources of Information on Mutual Funds  Wiesenberger's Investment Companies  Morningstar (  Fund prospectus  Yahoo  Wall Street Journal  Investment Company Institute (  Aall  Brokers Lecture Notes – 1/21 – Chapter 5 Chapter 5: Risk and Return: Past and Prologue Be familiar with: Holding period returns Geometric return calculation  N = number of terms Dollar/price weighted return (not so much the calculation) Subjective or Scenario Distributions Real vs. Nominal rates Capital Market - Equity (from Ch. 2) Capital Gains and Dividend Yields 5.1 Rates of Return Measuring Ex-Post (Past) Returns One period investment: regardless of the length of the period. Holding period return (HPR): HPR = [Ps- PB+ CF]/P wBere PS = Sale price (or P )1 PB = Buy price ($ you put up) (or P ) 0 CF = Cash flow during holding period  Q: Why use % returns at all?  Removes size of investment concerns  Q: What are we assuming about the cash flows in the HPR calculation?  CF should occur at the end of the period, otherwise missing reinvestment of those cash flows or the CF could be the future value of any interim cash flows Annualizing HPRs  Q: Why would you want to annualize returns? 1. Annualizing HPRs for holding periods of greater than one year: o Without compounding (Simple or APR): HPR = HPR/n ann o With compounding: EAR o HPR ann= [(1+HPR) ]-1/n  Where n = number of years held ** a good rule is to carry all calculations to at least four decimal places  Annualizing HPRs for holding periods of less than one year:  Without compounding (simple): HPR ann= HPR x n n  With compounding: HPR ann= [(1+HPR) ]-1 o Where n= number of compounding periods per year  Finding the average HPR for a time series of returns: Lecture Notes – 1/21 – Chapter 5 Arithmetic Average  Without compounding (AAR or Arithmetic Average Return):  o N = number of time periods Geometric Average  With compounding (GAR)   Finding the average HPR for a portfolio of assets for a given time period: Where V =Iamount invested in asset I J = Total # of securities TV = total amount invested V/IV = percentage of total investment invested in asset I  Measuring returns when there are investment changes (buying or selling) or other cash flows within the period  It depends, there are different ways to measure this Dollar-Weighted Return  Dollar-weighted return procedure (DWR):  Find the internal rate of return for the cash flows (find the discount rate that makes the NPV of the net cash flows equal zero)  The DWR gives you an average return based on the stock's performance and the dollar amount invested (number of shares bought and sold) each period Tips on Calculating Dollar Weighted Returns:  This measure of return considers both changes in investment and security performance  Initial investment is an outflow  Ending value is considered an outflow  Additional investment is an outflow  Security sales are an inflow  If different amounts of money were managed in the portfolio for each quarter it may be useful to see the Dollar weighted returns Lecture Notes – 1/21 – Chapter 5 o If you invest money -- it's an outflow from your wallet o If you remove money from the investment -- it's an inflow into your wallet Time-Weighted Returns  TWRs assume you buy one share of the stock at the beginning of each interim period and sell one share at the end of each interim period  TWRs are independent of the amount invested in a given period To calculate TWRs:  Calculate the return for each time period, typically a year  Then calculate either an arithmetic (AAR) or a geometric average (GAR) of the returns Summary:  Arithmetic means are the sum of returns in each period divided by the number of periods o Good for forecasting performance in future periods o Bad because it ignores compounding needed to represent a single quarterly rate for the year  Geometric gives you the single period return that would give you the same cumulative performance as the sequence of actual returns When should you use the GAR and when should you use the AAR? When you are evaluating PAST RESULTS (ex-post):  Use the AAR if you are not reinvesting any cash flows received before the end of the period  Use the GAR if you are reinvesting any cash flows received before the end of the period When you are trying to estimate an expected return (ex-ante return):  Use the AAR 5.2 Risk and Risk Premiums Measuring Mean: Subjective or Scenario Returns: Subjective expected returns: E(r ) = P(s) r(s) E(r ) = Expected Return P(s) = probability of a state R(s) = return if a state occurs 1 to s states  Create a list of possible outcomes s, "states of nature"  Specify the likelihood of each state to occur p(s)  What is the return of the state occurs r(s) Measuring Variance or Dispersion of Returns: Subjective or Scenario Variance: Lecture Notes – 1/21 – Chapter 5 E(r ) = Expected Return P(s) = probability of a state R s return in state "s"  The variance formula is the sample variance formula that results when you multiply n/n-1 times the average of the sum of the squared deviations Using Ex-Post Returns to estimate Expected HPR:  Estimating Expected HPR from ex-post data o Use the arithmetic average of past returns as a forecast of expected future returns and apply some (usually ad-hoc) adjustment to past returns  Which historical time period?  Have to adjust for current economic situation  Unstable averages  Stable risk Characteristics of Probability Distributions 1 Mean: arithmetic average & usually most likely 2 Median: middle observation 3 Variance or standard deviation: dispersion of returns about the mean 4 Skewness: long tailed distribution, either size o Tells us how evenly the possible outcomes are distributed around the mean o Skewed distributions have a mean that is different than the median 5 Leptokurtosis: too many observations in the tails  If a distribution is approximately normal, the distribution is fully described by characteristics 1 and 3 o If return distributions are close to normal, mean and variance will do a good job at describing the expected return and the risk premium of an investment Normal Distribution Lecture Notes – 1/21 – Chapter 5  Risk is the possibility of getting returns different from expected  The normal distribution is symmetric around the mean  In a normal distribution the mean + or - one standard deviation will encompass approximately 68% of the possible outcomes  Since this is a normal distribution the mean and median outcome will be the same Skewed Distribution: Large Negative Returns Possible (Left Skewed) Skewed Distribution: Large Positive Returns Possible (Right Skewed) Value at Risk (VaR) Value at Risk attempts to answer the following question:  How many dollars can I expect to lose on my portfolio in a given time period at a given level of probability?  The typical probability used is 5%.  We need to know what HPR corresponds to a 5% probability.  If returns are normally distributed then we can use a standard normal table or Excel to determine how many standard deviations below the mean represents a 5% probability: Lecture Notes – 1/21 – Chapter 5  From Excel: =Norminv (0.05,0,1) = -1.64485 standard deviations VaR versus standard deviation:  For normally distributed returns VaR is equivalent to standard deviation (although VaR is typically reported in dollars rather than in % returns)  VaR adds value as a risk measure when return distributions are not normally distributed.  Actual 5% probability level will differ from 1.68445 standard deviations from the mean due to kurtosis and skewness. Risk Premium & Risk Aversion  The risk free rate is the rate of return that can be earned with certainty  The risk premium is the different between the expected return of a risky asset and the risk-free rate  Risk aversion is an investor's reluctance to accept risk  How is the aversion to accept risk overcome?  By offering investors a higher risk premium 5.3 The Historical Record Deviations from Normality: Another Measure  If returns are normally distributed then the following relationship among geometric and arithmetic averages holds: 2 Arithmetic Average - Geometric Average = ½     The arithmetic mean is the typical expected return for a given year, while the geometric mean is the return needed for every year to get the same cumulative returns as provided by the sequence of historical returns  Generally the higher the returns the higher the variance and standard deviation 5.4 Inflation and Real Rates of Return Real vs. Nominal Rates  Fisher effect: Approximation Real rate = nominal rate - inflation rate Rreal R nom - I  Fisher effect: Exact Rreal [(1+R nom)/(1+i)] - 1  The nominal rate is the rate that's not adjusted for inflation  The real rate of return accounts for inflation Lecture Notes – 1/21 – Chapter 5  Real returns have been much higher for stocks than for bonds  Sharpe ratios measure the excess return to standard deviation  The higher the Sharpe ratio the better  Stocks have had much higher Sharpe ratios than bonds 5.5 Asset Allocation Across Risky and Risk Free Portfolios  It's possible to split investment funds between safe and risky assets  Risk free asset rf : proxy; T-bills or money market fund  Risky asset or portfolio r p risky portfolio  To calculate weights in rp: Divide the amount in each investment by the total amount invested to find each individual weight Issues in setting weights:  Examine risk and return tradeoff  Demonstrate how different degrees of risk aversion will affect allocations between risky and risk free assets  Assuming the risky portfolio has been optimized, depending on your level of risk, you must merely choose between your weights of the risk free and the risky portfolio Expected Returns for Combinations E(rc) = Return for complete or combined portfolio The percentage in the risky portfolio times the expected return of the risky portfolio plus the percentage in the risk-free times its return  Varying y results in E[r C and C that are linear combinations of E[rp] and rf and  and  respectively. rp rf Lecture Notes – 1/21 – Chapter 5  This is not generally the case for the Of combinations of two or more risky assets Risk Aversion and Allocation  Greater levels of risk aversion lead investors to choose larger proportions of the risk free rate  Lower levels of risk aversion lead investors to choose larger proportions of the portfolio of risky assets  Willingness to accept high levels of risk for high levels of returns would result in leveraged combinations Quantifying Risk Aversion E(rp) = Expected return on portfolio p Rf = the risk free rate 0.5 = 0.5 scale factor A x p= proportional risk premium  The larger A is, the larger will be the investor's added return required to bear risk  Used to describe how investors are willing to trade off risk for expected return Rearranging the equation and solving for A:  Many studies have concluded that investors' average risk aversion is between 2 and 4 A and Indifference Curves ("not in the chapter but should be")  The A term can used to create indifference curves.  Indifference curves describe different combinations of return and risk that provide equal utility (U) or satisfaction.  U = E[r] - 1/2A 2 p  Indifference curves are curvilinear because they exhibit diminishing marginal utility of wealth.  The greater the A the steeper the indifference curve and all else equal, such investors will invest less in risky assets.  The smaller the A the flatter the indifference curve and all else equal, such investors will invest more in risky assets.  Investors want the most return for the least risk 5.6 Passive Strategies and the Capital Market Line A Passive Strategy Lecture Notes – 1/21 – Chapter 5  Investing in a broad stock index and a risk free investment is an example of a passive strategy  The investor makes no attempt to actively find undervalued strategies nor actively switch their asset allocations  The CAL that employs the market (or an index that mimics the overall market performance) is called the Capital Market Line or CML Active vs. Passive Strategies  Active strategies entail more trading costs than passive strategies  Passive investor "free-rides" in a competitive investment environment  Passive involves investment in two passive portfolios  Short-term T-bills  Fund of common stocks that mimics a broad market index  Vary combinations according to investor's risk aversion


Buy Material

Are you sure you want to buy this material for

25 Karma

Buy Material

BOOM! Enjoy Your Free Notes!

We've added these Notes to your profile, click here to view them now.


You're already Subscribed!

Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'

Why people love StudySoup

Steve Martinelli UC Los Angeles

"There's no way I would have passed my Organic Chemistry class this semester without the notes and study guides I got from StudySoup."

Anthony Lee UC Santa Barbara

"I bought an awesome study guide, which helped me get an A in my Math 34B class this quarter!"

Jim McGreen Ohio University

"Knowing I can count on the Elite Notetaker in my class allows me to focus on what the professor is saying instead of just scribbling notes the whole time and falling behind."


"Their 'Elite Notetakers' are making over $1,200/month in sales by creating high quality content that helps their classmates in a time of need."

Become an Elite Notetaker and start selling your notes online!

Refund Policy


All subscriptions to StudySoup are paid in full at the time of subscribing. To change your credit card information or to cancel your subscription, go to "Edit Settings". All credit card information will be available there. If you should decide to cancel your subscription, it will continue to be valid until the next payment period, as all payments for the current period were made in advance. For special circumstances, please email


StudySoup has more than 1 million course-specific study resources to help students study smarter. If you’re having trouble finding what you’re looking for, our customer support team can help you find what you need! Feel free to contact them here:

Recurring Subscriptions: If you have canceled your recurring subscription on the day of renewal and have not downloaded any documents, you may request a refund by submitting an email to

Satisfaction Guarantee: If you’re not satisfied with your subscription, you can contact us for further help. Contact must be made within 3 business days of your subscription purchase and your refund request will be subject for review.

Please Note: Refunds can never be provided more than 30 days after the initial purchase date regardless of your activity on the site.