Equations

Question 1

Real rate of return

Answer 1

1+nominal / 1+inflation -1

Question 2

Forward Rate (FX)

Answer 2

1+Quote rate / 1+Base rate x Spot Rate

Question 3

Index-linked Coupon

Answer 3

Coupon x RPI at coupon / RPI at issue

Question 4

Flat Yield

Answer 4

Gross annual coupon / price

Question 5

Gross Redemption Yield

Answer 5

(Coupon/price x100)
+ or -
(profit / duration / price x100)

Question 6

Holding Period Return

Answer 6

ValEnd - ValStart / ValStart

Question 7

Sharpe Ratio

Answer 7

Return - Risk Free / Standard Deviation

Question 8

Treynor Ratio

Answer 8

Return - Risk free / Beta

Question 9

Alpha (Jensen)

Answer 9

Return - CAPM

Question 10

Present Value of a bond

Answer 10

Coupon x 1/rate x (1-1/1+rate)^periods + Nominal Value / (1+rate)^periods

Question 11

Dirty Price of a bond

Answer 11

Clean price + (coupon payment x Actual / Actual)

Question 12

Modified Duration

Answer 12

MaCaulay Duration / 1+Current Yield

Question 13

Simple Interest on Corporate Debt

Answer 13

Total Price x Par/Price x Coupon

Question 14

Convertible Loan Stock Premium

Answer 14

Price / Conversion ratio - share price / share price

Question 15

Warrant conversion premium

Answer 15

Warrant value + Exercise Price - share price

Question 16

Net Book Value

Answer 16

Cost - Accumulated Depreciation

Question 17

Calculate just the accrued interest of a bond?

Answer 17

Days accrued interest / 365 x coupon

Question 18

Cost of sales

Answer 18

Opening inventory
+
Purchases
-
Closing inventory

Question 19

Gearing

Answer 19

Debt / shareholders funds