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R Stdev: X X N X Var X Stddev

The document contains formulas and definitions for financial calculations including: 1) The formula for real rate of return which accounts for inflation and weighted average cost of capital (WACC) which is a weighted average of the cost of equity and debt. 2) Formulas for future value, effective interest rate, standard deviation, variance, and covariance which are used to calculate risk and returns. 3) The capital asset pricing model (CAPM) formula which relates expected return to beta and market risk premium. 4) Definitions for cost of debt, correlation, mean, variance as they relate to expected returns and risk calculations.

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nnggg
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1K views2 pages

R Stdev: X X N X Var X Stddev

The document contains formulas and definitions for financial calculations including: 1) The formula for real rate of return which accounts for inflation and weighted average cost of capital (WACC) which is a weighted average of the cost of equity and debt. 2) Formulas for future value, effective interest rate, standard deviation, variance, and covariance which are used to calculate risk and returns. 3) The capital asset pricing model (CAPM) formula which relates expected return to beta and market risk premium. 4) Definitions for cost of debt, correlation, mean, variance as they relate to expected returns and risk calculations.

Uploaded by

nnggg
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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(1 + )
= 1 = + (1 ) Stdev(rp ) p2
(1 + ) ( + ) ( + )
:

= ( ) (1 + ) 1 N
Var ( x)
N
( x x)
i 1
i
2

=
0 (1 + )
+
0

= 1 N

= (1 + ) 1
StdDev( x) x Var ( x)
N
( xi x ) 2
i 1
=
(1 + )

=
( , ) 1 N
=
( ) Co var( x, y )
N
[(xi 1
i x)( y i y )] =
,

( ) Cov( x, y ) Market value of equity (E)


( ) = + [ ] Correlation( x, y ) = Current number of shares * Current market price
x y per share

( ) = + [ ( ] Mean(rp ) p x A rA xB rB x A rA (1 x A )rB Market value of debt (D)


= Book value of debt

Ex-Post T-Bill Return: Var (rp ) p2 x A2 A2 xB2 B2 2 x A xB AB =


Bought 1 June 2009 977.04
=
Sold 1 September 2009 986.27
Monthly return 0.31%
Annualized return 3.83%
Page 2 of 2

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