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CFA Level 1 Exam - Formulas Questions and Answers 2024( A+ GRADED 100% VERIFIED). $11.99   Add to cart

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CFA Level 1 Exam - Formulas Questions and Answers 2024( A+ GRADED 100% VERIFIED).

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CFA Level 1 Exam - Formulas Questions and Answers 2024( A+ GRADED 100% VERIFIED).

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  • September 6, 2024
  • 19
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • future value fv ans fv
  • CFA Level 1 - Formulas
  • CFA Level 1 - Formulas
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CFA Level 1 Exam - Formulas
Nominal 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)

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