Calculations Flashcards
(18 cards)
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
Corporate Rate * (11% - Tax Bracket)
Tax-free 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 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 annualized basis
Inflation-adjusted (real) return
Total return - CPI
After-tax return
Total return - 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
Alpha (RF not given)
Actual Return - (Beta * [Market Return - RF] )
The risk adjusted returns that a portfolio manager generates in excess of the risk adjusted retuns expected by the capital asset pricing model (CAPM).
Alpha (Rf given)
(Actual Return - RF) - (Beta * [Market Return-RF] )
Sharpe Ratio
Actual Return - RF / Standard Deviation
The Sharpe Ratio measures the risk adjusted return of an investment. It is calculated by dividing the excess return of an asset over the 91 day Treasury Bill rate by its standard deviation. It measures the reward per unit of risk so the higher the ratio, the better.
