Equations

Question 1

Effective Annual Rate

Answer 1

((1+r)^n -1) x 100)

Question 2

Annuity

Answer 2

PV = CF x 1/r (1 - 1/1+r^n)

Question 3

Return on Capital employed

Answer 3

Operating Profit / Capital Employed (TA - CL or SHF + NCL)

Question 4

Return on Equity

Answer 4

Net Income / Shareholder Equity

Question 5

Operational Gearing

Answer 5

Sales Revenue - VC : OP

OP + FC : OP

Question 6

Financial Gearing

Answer 6

Debt / Capital Employed or Debt / Equity (SHF)

Question 7

Information Ratio

Answer 7

PR - Manager Risk / Tracking Error

Question 8

Jensen Alpha

Answer 8

RCAPM= Rf +B ( MR - RF)
JA = PR - CAPM

Question 9

CAPM BETA Coefficient

Answer 9

Bp = COV(Rp - RM / VAR RM)

Question 10

Conversion Ratio

Answer 10

Par Value / conversion price

Question 11

conversion value

Answer 11

Current share price x conversion ratio

Question 12

conversion Premium

Answer 12

Bond price - conversion value / conversion value

Question 13

Macauley duration

Answer 13

Sum of PV of cashflows x time to cashflow / sum of pv of cashflows

Question 14

Modified duration

Answer 14

duration / 1 + yield

Question 15

Gordon Growth model

Answer 15

Do (1 + g) / R - G or D1/R-G