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    Finance Exam 2 Cheat Sheet: by Via

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    Kimondo King
    This document provides a cheat sheet for finance exam 2, defining key terms related to time value of money, bonds, interest rates, and formulas. It includes over 50 definitions of financial concepts arranged in alphabetical order, such as discount rate, callable bond, coupon rate, and yield curve. Several key formulas are also presented, like compound interest, present value, future value, bond price, current yield, and return calculations.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Finance Exam 2 Cheat Sheet: by Via

    Uploaded by

    Kimondo King
    52 views2 pages
    This document provides a cheat sheet for finance exam 2, defining key terms related to time value of money, bonds, interest rates, and formulas. It includes over 50 definitions of financial concepts arranged in alphabetical order, such as discount rate, callable bond, coupon rate, and yield curve. Several key formulas are also presented, like compound interest, present value, future value, bond price, current yield, and return calculations.

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    Andrewdefinis Finance Exam 2

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    This document provides a cheat sheet for finance exam 2, defining key terms related to time value of money, bonds, interest rates, and formulas. It includes over 50 definitions of financial concepts arranged in alphabetical order, such as discount rate, callable bond, coupon rate, and yield curve. Several key formulas are also presented, like compound interest, present value, future value, bond price, current yield, and return calculations.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    52 views2 pages

    Finance Exam 2 Cheat Sheet: by Via

    Uploaded by

    Kimondo King
    This document provides a cheat sheet for finance exam 2, defining key terms related to time value of money, bonds, interest rates, and formulas. It includes over 50 definitions of financial concepts arranged in alphabetical order, such as discount rate, callable bond, coupon rate, and yield curve. Several key formulas are also presented, like compound interest, present value, future value, bond price, current yield, and return calculations.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    finance exam 2 Cheat Sheet

    by andrewdefinis via cheatography.com/35480/cs/11154/

    defini​tions defini​tions (cont) defini​tions (cont)

    discou​ntin the compound reduction from FV APR yearly uncomp​ounded rate of Bone annual % rate converted from
    g to PV interest equivalent bank discount rate on a treasury
    yield (BEY) bill
    compou​ndi the earning of interest on interest EAR compound rate of interest per year
    ng (effective callable bond that issuer has the right to
    annual bond buy back prior to maturity at a
    compound interest earned in subsequent
    rate) predet​ermined price
    interest periods on the interest earned in
    previous periods compou​n period in which interest is applied conver​tible right to swap bond for another
    ding bond asset, usually common stock, at
    lump-sum one time payment at a PV or FV
    period a preset conversion ratio under
    payment
    certain conditions
    fisher relati​onship which nominal interest
    TVM key value that a dollar today is
    effect rate is a function of the real rate, corpus bond with the coupons clipped off
    worth more than a dollar tomorrow
    inflation, and product of inflation repres​enting only principal
    amorti​zati listing of periodic interest expense,
    and real rate coupon regular interest pmt of bond
    on reduction in principal each period,
    maturity the portion of the nominal interest
    schedule ending balance for each period current annual bond coupon pmt divided
    premium rate that compen​sates the investor
    amortized loan in which interest and principal yield by current price
    for additional waiting time to receive
    loan is paid each period debentures unsecured bonds
    payment in full
    annuity series of equal cash flows at floating bond with changing coupon rate
    nominal interest rate composed of real
    regular intervals across time rate bond
    interest interest rate plus the inflation rate
    annuity series of equal & regular pmts at rate indenture formal contract of a bond
    due the beginning of a period detailing important inform​ation
    periodic the number of compou​nding
    console stocks that pay interest forever, no interest periods per year junor debt debt subsequent to the other
    (perpetual maturity date, no promise to pay rate (senior) debt with lower priority of
    bonds) principal pmt
    real the reward for waiting
    discount loan where interest & principal is interest par value principal amount to be paid at the
    loan repaid at maturity rate maturity date

    interest loan where interest is paid reward real rate of interest paid for forgoing premium bond that current value is above
    only loan regularly. principal & final interest for use of money today. bond par value
    is paid at date due. waiting prime rate interest rate banks charge their
    perpetuity infinite regular & equal pmts risk free theore​tical interest rate with zero best customers
    rate risk of any kind protective part of the bond that spells out
    yield graph relating return rate and an covenant both required and prohibited
    curve asset's time to maturity actions of the bond issuer

    basis one hundredth of a percentage


    point point

    bearer bond where ownership to the


    bond possessor

    By andrewdefinis Published 14th March, 2017. Sponsored by Readability-Score.com


    Last updated 14th March, 2017. Measure your website readability!
    Page 1 of 2. https://readability-score.com

    cheatography.com/andrewdefinis/
    finance exam 2 Cheat Sheet
    by andrewdefinis via cheatography.com/35480/cs/11154/

    defini​tions (cont) formulas (cont)

    putable bond holder has the right to sell the EAR =


    bond bond back to the issuer at a (1 + APR/m)m - 1
    determined price prior to maturity
    .r≈
    sinking special fund for the retirement of
    fund debt on bonds r* + h

    STRIPS zero-c​oupon bonds made by r=


    separating the interest and principal r* + inf + dp + mp
    on us. govt bonds
    Bond Price (PB) =
    treasury govt bond with a maturity less than
    Coupon PMT [(1 - 1/(1 + r)n) / r] + Par / (1 +
    bill one year
    r)n
    treasury govt bond with maturity of more than
    bond ten years Current Yield =

    treasury govt bond with a maturity between 2 Annual Coupon PMT / PB


    note and 10 years YTM =
    yield to discount rate of return for a callable (Par/P​B)(1/n) – 1
    call premium bond
    YTM ≈
    yield to return the holder receives if held on
    maturity till maturity (Coupon + (Par –PB)/n) / [.4 Par + .6 PB]
    (YTM) Profit =
    zero- a bond that pays no coupons over its ending value + distri​but​ion​s-o​riginal cost
    c​oupon maturity
    bond HPR =

    (profit or loss)/​ori​ginal cost


    formulas Simple annual return =

    compou​nding interest HPR/n

    FVn=PV​o(1​+r)^n (finding fv) EAR =

    (1 + HPR)(1/n) - 1
    PVo=FVo/ (1+r)^n (finding pv)
    Variance (X) =

    [∑(Xi – Average)2] / (n – 1) = σ2 (Divisor of


    n=ln(f​v/p​v)/​ln(1+r) (finding time)
    (n – 1) for sample and (n) for popula​tion)

    Standard Deviation =
    R= (FVo * PVo) ^ (1/n) -1 (finding rate)
    (σ2)(1/2) = σ
    FVn=
    Re =
    PMT [((1 + r)n - 1) / r]
    E (ri) = rf + βi [E(rm) - rf]
    PVt =

    PMT(t+1) [(1 - 1/(1 + r)n) / r] calculator input


    PVt =

    PMT(t+1) / r
    excel
    Periodic Interest Rate

    r = APR / m

    By andrewdefinis Published 14th March, 2017. Sponsored by Readability-Score.com


    Last updated 14th March, 2017. Measure your website readability!
    Page 2 of 2. https://readability-score.com

    cheatography.com/andrewdefinis/

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