Calculations Flashcards

1
Q

Interest Yield on Bonds

A

coupon or nominal yield/Clean Price x 100

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2
Q

Redemption Yield on Bonds

(where the redemption yield is less than the interest yield there will be a capital loss if held to redemption

A

Gain or loss/number of years to maturity= /Clean price x 100

Interest yield - sum above = redemption yield

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3
Q

Earnings per Share

A

Profit attributable to ordinary shareholders (after tax, minority interests, preference shares satisfied) / number of ordinary shares in issue

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4
Q

Dividend Yield

A

Dividend per share/current share price x 100

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5
Q

Dividend Cover

A

Individual = earnings per share/dividend per share

Total profit = profit attributable to ordinary share holders/Dividend paid to ordinary shareholders.

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6
Q

Price earnings ratio (P/E)

A

Current market price of share/earnings per share

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7
Q

Net asset value (NAV)

A

Net assets attributable to ordinary shareholders/number of ordinary shares in issue

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8
Q

Rental yield

A

Gross rent x 12/market price x 100= yield

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9
Q

CAPM ( Capital asset pricing ratio)

A

Rf + Bi (Rm-Rf) = E(Ri)

Rf - rate of return on a risk free asset
Rm - expected return of the market portfolio
Bi - the measure of sensitivity of the investment in the overall market
(Rm - Rf) market premium, the excess return of the market over the risk free rate
Bi (Rm-Rf) is the risk premium of the risky investment

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10
Q

Compound Interest

A

PV (1 + r)n = RV

use Xy on calculator

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11
Q

EAR

A

(1+r/n) power of n -1 (x 100 for rate)

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12
Q

Present Value

A

FV (1+r)n

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13
Q

Regular payment discounting

A

FV=P (1+R)n -1 = /r

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14
Q

discounted cash flow

A

PV = FV/(1+r)n

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15
Q

Annuity formula

A

A= p(1- (1+r)-n / r

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16
Q

Holding period return

A

R = D + V(1) -V (0) / V(0)

17
Q

Money weighted rate of return

A

MWR = D = V (1) - V(0) - C / V(0) + (C x n/12)

18
Q

Time Weighted returns

A

TWR = V1/Vo x V2/(V1 +c) -1

19
Q

The Sharpe ratio

A

Return on investment - risk free return/standard deviation of the return on the investment

20
Q

Information ratio

A

Rp - Ro/tracking error

21
Q

Calculation Alpha - a

A

Rf - risk free rate of return
Rm is the market return
Bi is the beta of the fund

a = acutal portfolio return - (Rf + (bi x (Rm-Rf)