Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
22 Cards in this Set
- Front
- Back
Intrinsic Value of Stock (Dividend Discount Model) |
Dividend x Growth rate / Required Return - Growth rate D1 / r - g = V |
|
Expected Return of Stock |
(D1 / Price of stock) x growth rate |
|
Capital Asset Pricing Model (CAPM) / Required Return of stock or portfolio |
Required Return = risk free rate + (market return - risk free rate)Beta |
|
Standard Deviation of Security |
The square root of [( the sum all annual returns - mean of annual returns)^2 / (the number of returns - 1)] |
|
Beta |
(Standard deviation of asset / standard deviation of market) x correlation coefficient (R) OR (Correlation Coefficient x std dev of asset) / std dev of the market |
|
Standard Deviation of Portfolio |
The square root of [(weight of security 1)^2)(standard deviation of security 1)^2 + (weight of security 2)^2(standard deviation of security 2)^2 and so on....+2(weight of security 1)(Weight of security 2)(Covariance of the portfolio)] |
|
Covariance |
Correlation coeffiecient (R) x Std dev of security 1 x std dev of security 2 |
|
Correlation Coefficient |
Covariance / (Std dev 1 x Std dev 2) |
|
Components of Duration Formula |
Y = Yield to maturity per period (market interest rates). If there is semiannual compounding, y / 2. C = Coupon rate of bond per period. If semiannaul, C / 2. T = # of periods until maturity. If semiannual, T x 2 |
|
Change in the price of a bond |
Change in price = -D[(expected change in rates) / (1 + y)] D = Duration y = current yield to maturity (current interest rate). If semiannual, y / 2. |
|
Conversion Value of Convertible Bond |
CV = [(Par Value (1K)) / (Conversion Price)] x Current Market Price of Stock |
|
Net Operating Income (NOI) |
PGI - vacancy and collection losses - operating expenses |
|
Market Value of Complex |
NOI / Capitalization Rate |
|
SHARPE Ratio |
Return - Risk free Rate of Return / Std Dev |
|
Treynor |
Return - Risk free rate of return / Beta |
|
Information Ratio |
Return - Return of Benchmark / Tracking error |
|
Jensen (Alpha) |
Return - CAPM |
|
Basic Liquidity Ratio |
Liquid Assets / Monthly Expenses |
|
Debt to Asset Ratio |
Total Debt / Total Assets |
|
Debt to Income Ratio |
Annual Debt Repayments / Gross Income |
|
Debt Service Ratio |
Annual Debt Repayments / Annual Take Home Pay |
|
Investment Assets to Net Worth |
Investment Assets / Net Worth |