Formulas To Memorize

Question 1

Margin call

Answer 1

1- initial margin %
————————- X purch price
1 - maintenance %

Question 2

P/E ratio

Answer 2

Current price / earnings

Question 3

Stock yield

Answer 3

Dividends per share
—————————-
stock price per share

Question 4

Dividend payout ratio

Answer 4

Common dividends paid
———————————
EPS
(Earnings available for common)

Question 5

ROE

Answer 5

(Earnings available for common)

EPS
____
Common equity

(NW or Bookvalue)

Question 6

Tax exempt yield

Answer 6

Taxable yield X (1-marginal tax)

Question 7

Taxable equivalent yield
TEY

Answer 7

Tax exempt yield
————————
1-marginal rate

Question 8

Intrinsic value (PUT)

Answer 8

Exercise price - market price

“PUT EM”

Question 9

Intrinsic Value
(CALL)

Answer 9

Market price - exercise price
“CALL ME”

Question 10

Property Intrinsic Value

Answer 10

NOI
——
Capitalization Rate

Question 11

Current Yield

Answer 11

Annual Interest in dollars
———————————-
Bond market price

Question 12

Property Loss Calculation
(Amount paid by insurance)

Answer 12

Insur Carried
—————— X Loss - Deductible
Insur required

Insur required:
Replacement cost X coinsurance

Question 13

Actual Cash Value

Answer 13

Replacement cost
————————-
Amount of depreciation

Minus deductible = ANSWER

Question 14

Exclusion Ratio
Percent EXCLUDED from Tax

Answer 14

Basis
———
Expected payout

Question 15

Holding Period

Answer 15

SOLD FOR - (margin borrowed+ Margin interest) - BOUGHT FOR

—————————————-
Bought for