Chapter 1

Question 1

Real Risk Free Rate

Answer 1

(1 + Nominal Rate) /
(1 + Inflation Rate)

Question 2

Nom Risk Free Rate

Answer 2

(1+Real Risk Free) * (1+Inflation) -1

Question 3

HPR

Answer 3

Question 4

Arithmetic Mean

Answer 4

Question 5

Geo Mean

Answer 5

Question 6

Harmonic Mean

Answer 6

Question 7

Time vs Money weighted
Definitions
Inflow before poor perf
Inflow before strong

Answer 7

Question 8

Non-Annual Compounding

Answer 8

Question 9

EAR

Answer 9

Question 10

Components of Interest Rates

Answer 10

Question 11

Annualized Returns

Answer 11

Question 12

Increase in Compounding Freq increases and decreases what

Answer 12

Question 13

PV of future CF

Answer 13

Question 14

Continuous Compounding Returns

Answer 14

Question 15

Price Relative

Answer 15

Question 16

Continuously Compounded Rate for Stated Rcc

Answer 16

Question 17

Relationship with Harmonic, Arithmetic, Geo

Answer 17

Question 18

Trimmed Vs Winsorized

Answer 18

Question 19

Gross Return

Answer 19

Return before mgmts fees (After trading expense)

Question 20

net Return

Answer 20

Return after mgmt fees and admin expense

Question 21

After-Tax Return

Answer 21

After deducting tax
(1-tax rate)

Question 22

Real Return

Answer 22

After adjusting for inflation

Question 23

Leverage Return Formula 1

Answer 23

% return on investors funds.

Question 24

Leverage Return Formula 2

Answer 24