Extra Formulas

Question 1

What is the bank discount yield formula?

Answer 1

BDY = ($ Discount / Face value) x (360/days to maturity)

Question 2

What is the holding period yield formula?

Answer 2

HPY = (change in price + div) / Price bgn

Question 3

What is the equivalent annual yield formula?

Answer 3

EAY = (1+HPY)^(365/t) - 1

Question 4

What is the money market yield formula?

Answer 4

MMY = (360 x bank discount return) / (360 - (t)(bd return)

Question 5

What is the covariance formula?

Answer 5

Covar = (Prob of AB)(DevA)(DevB)

Question 6

P(AB) formula

Answer 6

P(A | B) x P(B)

Question 7

P(A or B) formula

Answer 7

P(A) + P(B) - P(AB)

Question 8

P(A | B) formula

Answer 8

P(AB) / P(B)

Question 9

Independent probability formula changes

Answer 9

P(A | B) = P (A) or vice versa

Question 10

Bayes formula?

Answer 10

P(Event | Info) = P(Info | Event) x P(Event) / P(Info)

Question 11

What is the national income formula?

Answer 11

Y = C + I + G + (X - M)

Question 12

What is the sustainable growth rate formula?

Answer 12

Sus Grow = ROE x (1 - payout ratio)

Question 13

Cash conversion cycle formula?

Answer 13

Cash conv. = DIO + DSO - DPO

Question 14

Debt-to-Capital formula

Answer 14

DtC = Debt / Debt + SH Equity

Question 15

DOL formula?

Answer 15

DOL = % change in Op income / % change in units sold

Question 16

Operating cycle formula?

Answer 16

Op Cycle = DIO + DRO

Question 17

DFL Formula?

Answer 17

DFL = % change in net income / % change in op income

Question 18

Bond equivalent yield?

Answer 18

BEY = (FV-PP / PP) x (360/days to maturity)

Question 19

Beta formula?

Answer 19

Beta = Covariance of asset and market return / Variance of market return

Question 20

Put Call Parity formula?

Answer 20

P-C-P = S + P = C + x/(1+r)^t

Question 21

Formula to convert to periodicity?

Answer 21

(1 + APR/m)^m = (1 + APR/n)^n

Question 22

PV Banker acceptance formula?

Answer 22

PVBA = 100 x (1 - days/year x DR)

Question 23

What is the modulation duration formula?

Answer 23

ModDur = MacDur / (1+r)