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 investment; or divide 72 by known number of years = interest rate required to double investment
Arithmetic Mean
Simple average of the numbers
Median
The number in the middle
Mode
The number that appears most frequently
Range
The difference between the highest and lowest number
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
CAPM
Return on Stock = Risk free rate + Beta (Return on market - Risk free rate)
