R02 Equations

Question 1

The equation to know interest yield on gilt=

Answer 1

(Coupon/price) x 100

Question 2

The equation for price earning ratio=

Answer 2

share price/earnings per share

Question 3

The equation for dividend cover on an individual basis?

Answer 3

profit attributable ordinary shareholders/dividend paid to ordinary shareholders

Question 4

The net asset value (NAV)

Answer 4

Net asset attributable to ordinary shareholders/number of ordinary shares in issue

Question 5

The equation for dividend cover on a total profit basis?

Answer 5

earning per share/dividend per share

Question 6

What is the equation for Sharpe ratio?

Answer 6

return on the investment - risk free return/standard deviation of return on the investment

Question 7

What is the formula for CAPM?

Answer 7

=risk free return+beta(market return-risk free)

Question 8

What is the formula of running yield?

Answer 8

annual coupon/price paid for giltx100

Question 9

What type of share is being described here: ‘‘These shares take priority over other share types when dividends are paid. Dividends are usually paid half-yearly at a fixed rate. These shares generally have no voting rights.’

Answer 9

Preference shares