Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

CFP > Formulas > Flashcards

Formulas Flashcards

1
Q

Internal Rate of Return

A

Initial Investment (-) CFj
Cash Flows (±)CFj
Gold, IRR

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Unequal Cash Flow NPV

A

Initial Investment (-) CFj
Cash Flows (±)CFj
Req. ROR I/YR
Gold, NPV

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Unequal Cash Flow PV

A

0 CFj
Cash Flows (±)CFj
Req. ROR I/YR
Gold, NPV

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Amortization Calc

A

(12 P/YR)
PV = Mortgage
FV = 0
I/YR = Interest
N = Term

Solve, PMT
1, INPUT, # of Periods (months)
Gold, AMORT

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Geometric Mean Calc

A
  1. Add 1 to all decimal returns
  2. Multiply returns = A

FV = A
PV = -1
N = Investment periods

Solve, I/YR

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Bond Conversion Value Formula

A

(Par/Conversion Price) × FMV Stock

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Return on Equity

A

EPS/Book Value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

EPS/Book Value

A

Return on Equity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Standard Deviation Calc
(one investment)

A

Periodic returns (±) Σ
Gold, 8

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Bond Intrinsic Value Calc

A

(2 P/YR)
FV = 1000
PMT = Coupon/2
N = Term
I/YR = Comparable Interest

Solve, PV

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Coefficient of Variation Formula

A

Standard Deviation / Mean Return

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Standard Deviation / Mean Return

A

Coefficient of Variation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Dividend Payout Ratio Formula

A

Dividend / EPS

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Dividend / EPS

A

Dividend Payout Ratio

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Real Rate of Return

A

[(1+return/1+inflation)-1]x100

*Use decimals

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Bond YTM Calc

A

(2 P/YR)
PV = (-) FMV
FV = 1000
N = Term
PMT = Coupon/2

Solve, I/YR

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Tax Equivalent Yield Formula

A

Fed or Muni Interest / (1-Tax You Don’t Pay)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

After Tax Yield Formula

A

TEY x (1-Marginal Rate)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Real Estate Intrinsic Value Formula

A

NOI / Cap Rate

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

NOI / Cap Rate

A

Real Estate Intrinsic Value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Bond Current Yield

A

Annual Interest ($) / FMV Price

22
Q

Price / Free Cash Flow Formula

A

FCF(1+g) / (r-g)

*Use decimals

23
Q

FCF(1+g) / (r-g)

A

Price / Free Cash Flow

*Use decimals

24
Q

Holding Period Return Formula

A

Sale Price ± (What happened while holding) - What you paid / What you paid

25
Q

Margin Call Formula

A

[(1 - Margin %) / (1 - Maintenance %) ] x Purchase Price

26
Q

P/E Ratio

A

Price / EPS

27
Q

Constant DDM

A

D(1+g) / (r-g)

*Use decimals

(Use for intrinsic value of stock)

28
Q

Constant DDM
(no dividend given)

A

(P/E)(1+g) / (r-g)

*Use P/E for Div.
*Use decimals

(solve = intrinsic value of stock)

29
Q

COVij / σiσj

A

Correlation Coefficient

30
Q

Correlation Coefficient (covariance given)

A

COVij / σiσj

31
Q

Standard Deviation (Covariance given)

A

COVij / Pijσi

32
Q

COVij / Pijσi

A

Standard Deviation of Stock “j”

33
Q

rp - (rf+(rm-rf)β)

A

Alpha

*Use whole numbers

(solve = portfolio mgr. return)

34
Q

Alpha

A

rp - (rf+(rm-rf)β)

*Use whole numbers

(solve = portfolio mgr. return)

35
Q

Pijσiσj

A

Covariance

(solve = covariance)

36
Q

Covariance

A

Pijσiσj

(solve = covariance)

37
Q

Risk Adjusted Return

A

Return / β

38
Q

Return / β

A

Risk Adjusted Return

39
Q

rf + (rm-rf)β

A

Required Rate of Return AKA SML

*Use whole numbers

(solve = required ror)

40
Q

Required Rate of Return AKA SML
(“r” given)

A

rf + (rm-rf)β

*Use whole numbers

(solve = required ror)

41
Q

-D[∆y/(1+y)]

A

Change in bond price

*Use decimals

42
Q

Change in bond price

A

-D[∆y/(1+y)]

*Use decimals

43
Q

Pimσi/σm

44
Q

Beta (correlation coefficient given)

A

Pimσi/σm

(solve = risk of stock)

45
Q

COVim/σm^2

A

Beta

(solve = risk of stock)

46
Q

Beta (covariance given)

A

COVim/σm^2

(solve = risk of stock)

47
Q

βσm / σi

A

Correlation Coefficient

48
Q

Correlation Coefficient (Beta given)

A

βσm / σi

49
Q

[D(1+g)/P] + g

A

Required Rate of Return

*Use decimals

(solve = req. ror)

50
Q

Required Rate of Return (no “r” given)

A

[D(1+g)/P] + g

*Use decimals

(solve = req. ror)

CFP (6 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions