Quantitative Methods

Question 1

PV of a Perpetuity

Answer 1

A/R

Question 2

Growth Rate

Answer 2

[nroot(FV/PV)]-1

Question 3

IRR of Annuity

Answer 3

PV=A/IRR or IRR=A/PV

Question 4

Holding Period Return

Answer 4

(P1-P0+D)/(P0)

Question 5

Yield on Bank Discount Basis

Answer 5

(D/F)*(360/T)

Question 6

Effective Annual Yield

Answer 6

(HPR)^(365/t)

Question 7

Money Market Yield

Answer 7

(360BDY)/(360- tBDY)

Question 8

Time Series Data

Answer 8

Fetched from multiple points in time

Haha. Fetch.

Question 9

Cross Sectional Data

Answer 9

Fetched from one time period

Question 10

Weighted Mean

Answer 10

Summation of WiXi

Question 11

Geometric Mean

Answer 11

Nroot(X1X2Xn)

Question 12

Geometric Mean Return

Answer 12

Nroot[(1+R1)(1+R2)(1+Rn)] -1

Question 13

Find a given percentage point

Answer 13

Ly=(n+1)(y/100)

Question 14

Linear Interpolation

Answer 14

Multiple the difference of Ly and the next lowest whole number with the size of the interval, then add that to the next lowest number before Ly

Question 15

Variance

Answer 15

(Xi-X`)^2/N

Question 16

Standard Deviation

Answer 16

sqrt[(Xi-X`)^/N]

Question 17

Semivariance

Answer 17

Variance BELOW the mean

Question 18

Semideviation

Answer 18

Variance ABOVE the mean

Question 19

Chebyshev’s Inequalities Formula

Answer 19

The percentage of observations that will lie within k standard deviations is
1-1/k^2

Question 20

Coefficient of Variation

Answer 20

s/x` (standard deviation over mean)

Question 21

Sharpe Ratio (formula and what it measures)

Answer 21

Rp-Rf/Sp, measures excess return per unit risk

Question 22

Normal Distribution Qualities

including s%’s

Answer 22

Mean=Median
Completely described by mean and variance
1s-68%
2s-95%
3s-99%

Question 23

Positive Skewness Qualities

Answer 23

Mode Median Mean
Frequent Small Losses, Occasional large gains
Skewed to the RIGHT

Question 24

Negative Skewness Qualitites

Answer 24

Mean Median Mode

Frequent small gains, occasional large losses

Question 25

Sample Skewness Formula

Answer 25

[(n/(n-1)(n-2)*(Xi-X`)^3/s^3]

Question 26

Leptokurcic

Answer 26

More peaked
Fatter Tails
More Frequent large surprises

Question 27

Platykuric

Answer 27

Flatter peak

Question 28

Excess Kurtosis

Answer 28

3(n-1)^2/(n-2)(n-3)
In normal distribution, kurtosis=3

Question 29

Covariance

Answer 29

w1s1+w2s2+2w1w2s1s2p

Question 30

Right Skew

Answer 30

Positive Skew