Equations

Question 1

Interest Yield

Answer 1

(Coupon or Nominal Yield / Clean Price) X 100

Question 2

Redemption Yield

Answer 2

Interest Yield + or - ((gain or loss to maturity / number of years to maturity) / clean price) X 100

Question 3

Earnings per Share

Answer 3

Profit for Ordinary Shareholders / Number of Ordinary Shares in Issue

Question 4

Dividend Yield

Answer 4

(Dividend Per Share / Current Share Price) X 100

Question 5

Dividend Cover - Individual

Answer 5

Earnings Per Share / Dividend Per Share

Question 6

Dividend Cover - Total Profit Basis

Answer 6

Profit for ordinary shareholders / dividends paid to ordinary shareholders

Question 7

Price Earnings Ratio

Answer 7

Current Market Price of Share / Earnings Per Share

Question 8

Net Asset Value (NAV)

Answer 8

Net Assets attributable to ordinary shareholders / Number of ordinary share in issue

Question 9

Rental Yield

Answer 9

Gross Rent (for year) / Market Price

Question 10

Rental Yield incl expenses

Answer 10

((Gross year rent - expenses) / (Market price + costs of buying)) X 100

Question 11

Capital Asset Pricing Model (CAPM)

Answer 11

Expected return = Risk Free Rate + [Beta x Market Return Premium]

Question 12

Compounding Interest

Answer 12

Present Value X (1+Interest) power of years

Question 13

Effective Annual Rate (EAR)

Answer 13

(1+ (Nominal Rate / Compounding)) Power of Compounding Rate - 1

Question 14

Present Value (PV)

Answer 14

FV/(1 + rate) power of years

Question 15

Future Value (FV)

Answer 15

Payment X ((1+Interest)Power of Years - 1/ interest )

Question 16

Real Returns

Answer 16

RREAL = RNOM – RINF

where: RREAL is the real return;
RNOM is the nominal return; and
RINF is the inflation rate.

Question 17

Gearing

Answer 17

Total Gross Assets / Net Assets X 100

Question 18

Encashment (offshore bond)

Answer 18

Number of days policyholder was resident in UK / Number of days policy has run