Exam (elaborations)
CFA Level 1 Exam - Formulas Questions and Answers 2024( A+ GRADED 100% VERIFIED).
- Course
- Institution
CFA Level 1 Exam - Formulas Questions and Answers 2024( A+ GRADED 100% VERIFIED).
[Show more]
Seller
Follow
Content preview
CFA Level 1 Exam - FormulasNominal Interest Rate - ANS Nominal Int. Rate =
Real Rf Rate + Expected Inflation Rate
Required Interest Rate - ANS Required Rate =
Nominal Rf Rate + Default premium + liquidity premium + tenor premium
Effective Annual Rate (EAR) - ANS EAR =
(1 + stated annual rate / m)^m - 1
m: # of compounding periods / yr
Future Value (FV) - ANS FV =
PV*(1 + I/Y)^N
PV: amounted invested today
I/Y: rate of return per compounding period
N: total # of compounding periods
Present Value (PV) - ANS PV =
FV / (1+I/Y)^N
I/Y: rate of return per compounding period
N: total # of compounding periods
PV of a Perpetuity - ANS PV of a Perpetuity =
PMT / (I/Y)
Holding Period Return (HPR) - ANS HPR =
(Ending Value (incl. an CFs) / Beginning Value)) - 1
Bank Discount Yield (BDY) - ANS BDY =
,(D / F)*(360 / t)
D: Dollar discount (difference between face value and purchase price)
F: face value (par value)
t: # of days remaining until maturity
Holding Period Yield (HPY) - ANS HPY =
((P1 - P0 + D1) / P0))
OR
((P1 + D1) / P0)) - 1
P0: Price paid for instrument
P1: Price to be received at maturity
D1: interest payment (distribution to holder of instrument)
Effective Annual Yield (EAY) - ANS EAY =
(1 + HPY)^(365 / t) - 1
EAY can be converted to HPY by using the reciprocal of the exponent and plugging EAY into
formula in place of HPY
Money Market Yield (CD Equivalent Yield) - ANS MMY =
HPY*(360 / t)
Bond Equivalent Yield (BEY) - ANS BEY =
[(1 + EAY)^(1/2) - 1] * 2
Geometric Mean - ANS Geometric Mean =
((1+R1)*(1+R2)....(1+R10))^(1/n) - 1
Harmonic Mean = N / (1/Xi)
Xi: Observation or data point, there are N values of Xi - ANS Harmonic Mean =
, N / Sum of (1/Xi)
Xi: Observation or data point, there are N values of Xi
Position of the observation at a given percentile (y) w/ n data points sorted in ascending order: -
ANS Position of the observation at a given percentile (y) w/ n data points sorted in ascending
order:
Ly = (n+1)*(y/100)
Chebyshev's Inequality - ANS % of observations that lie w/in k standard deviations of the mean
=
1 - 1 / K^2
k: # of standard deviations
Coefficient of Variation (CV) - ANS CV =
Standard Deviation of X / Avg. Value of X
Sharpe Ratio - ANS Sharpe Ratio =
(Rp - Rf) / Std. of Portfolio Returns
Rp: portfolio return
Rf: risk-free return
Excess Kurtosis - ANS Excess Kurtosis =
sample kurtosis - 3
*Kurtosis of a Normal Distribution has a value of 3
Addition Rule of Probability: P (A or B) - ANS Addition Rule of Probability: P (A or B) =
P(A) + P(B) - P(A*B)
*The addition rule of probability is used to determine the probability that at least one of the 2
events will occur
Total Probability Rule: P(A) - ANS Total Probability Rule: P(A) =
P (A | B1)*P(B1) + P (A | B2)*P(B2)...+......P (A | Bn)*P(Bn)
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller KINGJAY. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $11.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
60434 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now