IMC Pt 2 Formulae

Question 1

Arithmetic Mean

(Statistics)

Answer 1

Question 2

Geometric Mean

(Statistics)

Answer 2

Question 3

Standard Deviation

(Statistics)

Answer 3

Question 4

Variance

(Statistics)

Answer 4

Question 5

Correlation Coefficient

(Statistics)

Answer 5

Question 6

Linear Regression

(Statistics)

Answer 6

Question 7

Compounding Formula

(Financial Maths)

Answer 7

Question 8

Compounding Continuously

(Financial Maths)

Answer 8

Question 9

Single Cash Flow Discounting

(Financial Maths)

Answer 9

Question 10

Annuity Formula

(Financial Maths)

Answer 10

Question 11

Perpetuity Formula

(Financial Maths)

Answer 11

Question 12

Effective Annual Rate (AER)

(Financial Maths)

Answer 12

Question 13

Index Factor for Price Weighted Indices

(Information and Indices)

Answer 13

Question 14

Index Factor for Market-Value Weighted Indices

(Information and Indices)

Answer 14

Question 15

Holding Period Return (HPR)

(Equities: Types and Features)

Answer 15

Question 16

Gordon’s Growth Model

(Equities: Types and Features)

Answer 16

g = Retention Ratio x ROE

Question 17

Warrant Formula

(Equities: Types and Features)

Answer 17

Question 18

Percent Premium

(Equities: Types and Features)

Answer 18

Question 19

Conversion Price

(Debt: Types and Features)

Answer 19

Question 20

Conversion Premium

(Debt: Types and Features)

Answer 20

Question 21

Theoretical Price of a Convertible Bond

(Debt: Types and Features)

Answer 21

Question 22

Present Value of a Bond

(Debt: Types and Features)

Answer 22

Question 23

Flat Yield

(Debt: Types and Features)

Answer 23

Question 24

Gross Redemption Yield (Yield to Maturity)

(Debt: Types and Features)

Answer 24

Iterative process using the present value of a bond formula

Question 25

Net Redemption Yield

(Debt: Types and Features)

Answer 25

Question 26

Macaulay Duration

(Debt: Types and Features)

Answer 26

Question 27

Modified Duration (MD)

(Debt: Types and Features)

Answer 27

Question 28

Interest Rate Parity

(Foreign Exchange)

Answer 28

Question 29

Purchasing Power

(Foreign Exchange)

Answer 29

Question 30

Fair Value of a Future

(Derivatives and Other Instruments)

Answer 30

Question 31

Basis

(Derivatives and Other Instruments)

Answer 31

Question 32

Hedge Ratio for Index Futures - Basic Hedge

(Derivatives and Other Instruments)

Answer 32

Question 33

Hedge Ratio for Index Futures - Beta Hedge

(Derivatives and Other Instruments)

Answer 33

Question 34

Option Premiums

(Derivatives and Other Instruments)

Answer 34

Question 35

Delta

(Derivatives and Other Instruments)

Answer 35

Question 36

Rental Yield

(Alternative Insvestments)

Answer 36

Question 37

Money Weighted Rate of Return (MWRR)

(Portoflio Theory)

Answer 37

Question 38

Time Weighted Rate of Return (TWRR)

(Portoflio Theory)

Answer 38

Separates returns into seperate holding periods and calculates geometric return over the full period

Question 39

Total Risk

(Portoflio Theory)

Answer 39

Question 40

Beta

(Portoflio Theory)

Answer 40

Question 41

Capital Asset Pricing Model (CAPM)

(Portoflio Theory)

Answer 41

Question 42

Jensen’s Alpha

(Portoflio Theory)

Answer 42

Question 43

Sharpe Ratio

(Portoflio Theory)

Answer 43

Question 44

Treynor

(Portoflio Theory)

Answer 44

Question 45

Information Ratio

(Portoflio Theory)

Answer 45

Question 46

Performance Measurement of a Bond Portfolio

(Portoflio Theory)

Answer 46

Question 47

Capital Asset Pricing Model for a Bond Portfolio

(Portoflio Theory)

Answer 47

Question 48

Straight Line Method of Depreciation

(Company Accounts)

Answer 48

Question 49

Reducing Balance Method of Depreciation

(Company Accounts)

Answer 49

Question 50

Earnings Per Share (EPS)

(Ratio Analysis)

Answer 50

Question 51

Earnings Yield

(Ratio Analysis)

Answer 51

Question 52

Dividend Yield

(Ratio Analysis)

Answer 52

Question 53

Dividend Cover

(Ratio Analysis)

Answer 53

Question 54

Price-Earnings Ratio (PE)

(Ratio Analysis)

Answer 54

Question 55

Debt to Equity Ratio (Gearing Ratio)

(Ratio Analysis)

Answer 55

Question 56

Operational Gearing (Gearing Ratio)

(Ratio Analysis)

Answer 56

Question 57

Interest Cover (Gearing Ratio)

(Ratio Analysis)

Answer 57

Question 58

Current Ratio (Liquidity Ratio)

(Ratio Analysis)

Answer 58

Question 59

Quick Ratio (Liquidity Ratio)

(Ratio Analysis)

Answer 59

Question 60

Return On Capital Employed

(Ratio Analysis)

Answer 60

Question 61

Price Elasticity of Demand

(Micro Economics)

Answer 61

Elastic > 1
Inelastic < 1
Shift ALONG the demand curve

Question 62

Income Elasticity of Demand

(Micro Economics)

Answer 62

0 > Normal good < 1
1 > Luxury good
Inferior good < 1
Giffen good: Price rise = demand up
Shift IN the demand curve

Question 63

Cross Elasticity of Demand

(Micro Economics)

Answer 63

+ive = substitute goods
-ive = complementary goods
Shift IN the demand curv

Question 64

Basic Multiplier (Multipliers)

(Macro Economics)

Answer 64

Question 65

Full Multiplier (Multipliers)

(Macro Economics)

Answer 65

Question 66

Money Multiplier (Multipliers)

(Macro Economics)

Answer 66

Question 67

Internal Rate of Return

Answer 67

PV (Inflows) - PV (Outflows) = 0

Question 68

Economic (Supernormal) Profit

Answer 68

Accounting profit - cost of sales - all other opportunity costs (owners time, next best use of capital etc.)

Question 69

Psotive Skew

Answer 69

Mean > Median > Mode