Final Exam Formula Sheet
FVIFn,i  (1  i )n
1
PVIFn,i 
 (1  i )- n
n
(1  i)
1
𝑖 −𝑛𝑥𝑚
𝑃𝑉𝐼𝐹 =
=
(1
+
)
𝑖 𝑛𝑥𝑚
𝑚
(1 + 𝑚)
1
𝐹𝑉𝑛 ⁄𝑛
𝑖=[
] −1
𝑃𝑉0

𝐹𝑉𝐼𝐹 = (1 +
𝐹𝑉
𝑙𝑛 [𝑃𝑉𝑛 ]
0⁄
𝑛=
ln(1 + 𝑖)
1
FVIFA n,i  (1  i )n  1
i
1
FVIFA - Duen,i  (1  i )n  1 (1  i )
i
𝐹𝑉 × 𝑖
ln (1 + 𝑃𝑀𝑇 )
𝑛=
ln(1 + 𝑖)


1
PVIFA n,i  1- (1  i )-n
i
1
PVIFA - Duen,i  1- (1  i )-n (1  i )
i

𝑛=



1
ln (
𝑃𝑉 × 𝑖 )
1 − 𝑃𝑀𝑇
ft 
m
(1  k t )t
1
(1  k t -1)t -1
2
i 

EIR  1    1
 m
i m

j  1    1
 2
kn = kr +  + kr
(1 + 𝑘𝑛 ) = (1 + 𝑘𝑟 ) × (1 + 𝜋)
𝑛
YTM = kr + INF + MRP + LRP + DRP
𝑃𝑏𝑜𝑛𝑑 = ∑
𝑖=1
$FVn

(1  i n )n
Pbond  $C 
Holding Period Return 
Pt  Pt 1 C t

Pt 1
Pt 1
𝐶
𝐹𝑉
+
(1 + 𝑘𝑖 )𝑖 (1 + 𝑘𝑛 )𝑛

1
𝑘𝑑⁄
2
[1 − (1 +
𝑘𝑑⁄ 2𝑛
2) ] +
Holding PeriodReturn 
𝐹𝑉
(1 +
𝑘𝑑⁄ 2𝑛
2)

1
$FV
1 - (1  kd )-n 
kd
(1  kd )n
Principal0 = Down payment + PMT x PVIFAdue + Buyout x PVIF
𝑃𝑏𝑜𝑛𝑑 = 𝐶⁄2 ∙

ln(1 + 𝑖)
𝑃𝑀𝑇
𝑃𝑉 =
𝑖
Pzero
𝑖 𝑛𝑥𝑚
)
𝑚
Pt  Pt 1 Dt

Pt 1
Pt 1

D
D

t
k
t 1 (1  k)
𝐷1 + 𝑃1
(1 + 𝑘)
P
𝑃0 =
D 0 (1  g) t D 0 (1  g)
D
P

 1
t
k-g
k-g
(1  k)
t 1
k
1
𝑇𝑃1
𝑃 = ( )(
)
𝑁 𝑘−𝑔
Po
Payout Rat io

EPS1
k-g

E(k p )  w1  E(k 1 )  ...  wn  E(k n )
n


σ

COV(k~1 , k~2 )  Σ Pri k 1i  E( k~1 ) k 2i  E( k~2 )
i1
σ
D1
g
P0
n
Pr k
i1
ρ ij 
i
i
 E(k)2
COV(k i , k j )
σi σ j
w 2σ 2a  (1  w)2 σ 2b  2w(1  w)ρa, bσ a σ b
n
E(k 1 )  Prik 1i
E(k i )  k f  βi (E(k M )  k f )
i1
Ti =
E(k i ) - k f
βi
βp  w1  β1  ...  wn  βn
βi 
COV(k i , k M )
σ 2M
σ i2  βi2  σ M2  σ 2di .