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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= expected change in rates


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