FORMULAS Flashcards
1
Q
The formula for current yield is
A
annual interest divided by current market value. An 8% bond would pay $80 a year. The bond is trading at $980 (98). 80 / 980 = 0.0816 (8.16% is the best answer.)
2
Q
The formula for net investment income is
________ + interest – expenses.
A
dividends + interest – expenses.
3
Q
The formula for calculating capital gains is
A
The formula for calculating capital gains is income received plus gains (or minus losses) divided by cost basis equals total return.
4
Q
Gross investment income is
A
interest and dividends received from securities in the investment company’s portfolio.
