Formulas

Question 1

Net Worth

Answer 1

A = L + NW

Assets = A
Liabilities = L
Net Worth = NW

Question 2

Working Capital

Answer 2

Assets available for use

WC = Current A - Current L

Question 3

Asked Price

Answer 3

Public Offering Price, or Retail Offering Price. The lowest price a seller is willing to accept.

AP = B + $SC
AP = B ÷ (1-SC%)

Question 4

Bid Price

Answer 4

Net Asset Value (NAV) of a fund or Wholesale Price is the current market price.

B = AP = $SC
B= AP x (1 - SC%)

Question 5

Sales Charge

Answer 5

Used to pay commissions or fees

$SC = AP - B
$SC = %SC x AP
%SC = $SC ÷ AP

Question 6

Withdrawal

Answer 6

When an investor cancels a plan

45-day WD= NAV + SC

Question 7

18 Month Refund

Answer 7

18MO = NAV = SC - 15%

Gross Contribution

Question 8

After-Tax Yield

Answer 8

After-Tax Yield = investor’s return x (100% - tax bracket)

Question 9

Cumulative Vote: Total Number of Votes

Answer 9

Cumulative Vote: Total Number of Votes = # of shares x # of vacancies

Question 10

Current Yield

Answer 10

Current Yield = annual interest ÷ current market price

Question 11

Distribution Cost Base

Answer 11

Distribution Cost Base = current share price - share purchase price

Question 12

Dividend Yield

Answer 12

Dividend Yield = annual dividend ÷ share price

Question 13

Expense Ratio

Answer 13

Expense Ratio = total expense ÷ total net assets

Question 14

Inflation-Adjusted Return

Answer 14

Inflation-Adjusted Return = stated return - inflation rate

Question 15

Market Cap

Answer 15

Market Cap = all outstanding shares x market price per share

Question 16

Municipal Bond Tax Equivalent Yield

Answer 16

Municipal Bond Tax Equivalent Yield = municipal yield ÷ 100%-marginal tax bracket

Question 17

Net Asset Value per Share

Answer 17

Net Asset Value per Share = total net assets ÷ total of outstanding shares

Question 18

P/E Ratio

Answer 18

P/E Ratio = market value of stock ÷ earning per share

Question 19

Percentage of the Sales Charge

Answer 19

Percentage of the Sales Charge = sales charge ÷ offering price