Calculations Flashcards
Current yield (stock)
annual dividend / current market price
Current yield (debt security)
annual interest / current market price
Number of shares for conversion
par value / conversion price
Parity
bond market value / number of shares
Tax-free equivalent yield
Corporate rate x (100% - tax bracket)
Tax-equivalent yield
Municipal rate / (100% - tax bracket)
NAV of mutual fund share
fund NAV / number of shares outstanding
Dollar cost average
total dollars invested / number of shares purchased
Average market price
share price total / number of investments
Shareholders’ equity
assets - liabilities
Total return
Income (dividends or interest) + gain or loss / original investment
Annualized return
Total return on an annualized basis
Inflation-adjusted (real) return
Total return minus the CPI
After-tax return
Total return minus the marginal tax bracket
Rule of 72
Divide 72 by known interest rate = number of years to double the investment
-or-
Divide 72 by known number of years = interest rate required to double investment
Arithmetic mean
Simple average of numbers
Median
In a group of numbers the one with an equal above and below, i.e., the number in the middle
Mode
In a group of numbers, the one appearing most frequently
Range
Ina group of numbers, the difference between the highest one and the lowest one
Alpha (RF not given)
Actual return - (beta x market return)
Alpha (RF given)
(Actual return - RF) - (beta x [market return -RF])
Sharpe ratio
Actual return - RF / standard deviation
