Time Value of Money Flashcards
1
Q
Present Value
A
= future value / [(1 + periodic rate)^#periods]
2
Q
PV of perpetuity
A
= periodic pmt / periodic interest rate
3
Q
Effective Annual Rate
A
= [( 1 + i / m ) ^ m] - 1
4
Q
bond equivalent yield
A
= [ (face value - price) / price ] * (365/days)
= HPY * 365 / days
= 2 * semiannually compounded yield
5
Q
money market yield
A
= HPY * 360 / days
6
Q
money weighted return
A
portfolio IRR
affected by cash flows into and out of an investment account
7
Q
bank discount yield
A
= [(face value - price)/ face value] * 360 / days
8
Q
Holding Period Yield
A
= (P1 - P0 + D1) / P0
