Equations not on the Excel

Question 1

What is the bank discount rate formula for T-bills? (assume it’s a 10k $ bill)

Answer 1

Where P = market price of the T-bill and n = number of days to maturity.

Question 2

What is the formula for calculating total return on a stock investment?

Answer 2

Question 3

What is the formula for calculating dividend yield?

Answer 3

Question 4

What is the formula for calculating capital gains yield?

Answer 4

Question 5

What is the formula for calculating short sale equity?

Answer 5

Short sale equity = Total margin account - Market value

Question 6

Define net asset value (NAV).

Answer 6

Assets minus liabilities per share.

Question 7

What is the formula for Holding-Period Return (HPR)?

Answer 7

Question 8

Arithmetic average

Answer 8

Question 9

Sharpe Ratio

Answer 9

Question 10

How is the Annual Percentage Rate (APR) calculated?

Answer 10

APR = Per-period rate × Periods per year

Question 11

How is portfolio risk premium calculated?

Answer 11

E(rp) - rf

Question 12

How is the Expected Return of the Complete Portfolio calculated?

Answer 12

y = Percentage of assets in the risky portfolio.

Question 13

What is the expected return on a two-security portfolio formula?

Answer 13

Question 14

Excess return

Answer 14

Question 15

Geometric Average

Answer 15

Question 16

Dollar-weighted return

Answer 16