CFA Chartered Financial Analyst Level 1 Formulas Questions with Correct Answers.

Price change based on convexity Correct Answer -duration(change in yield)+1/2(convexity)(change in yield)^2 Effective Duration Correct Answer Required if a bond has embedded options: [(v-)-(v+)]/[2V0(change in curve)] Modified Duration Correct Answer [(v-)-(v+)]/[2V0(change in yield)] Future Value Correct Answer PV(1+(I/Y)^N) PV Correct Answer FV/(1+r)^n PV of perpetuity Correct Answer PMT / discount rate Approximate percentage price change of a bond Correct Answer (-)(modified duration)(ΔYTM) Nominal Risk Free Correct Answer Real Risk Free + expected inflation Required Return Correct Answer Nominal risk free + liquidity premiums + default risk premium + maturity risk premium EAR Correct Answer [(1+periodic rate)^N ] - 1 EAR continuous Correct Answer e^r - 1 Bank discount yield Correct Answer (FV - Price)/(FV) * (360/T) HPY Correct Answer [(P1+D1)/P0] - 1 EAY Correct Answer (1+HPY)^(365/T) - 1 HPY (MMY equation) Correct Answer MMY * (T/360) MMY Correct Answer HPY * (360/T) Geometric return Correct Answer [(1+r1)(1+r2)(1+r3)]^(1/n) - 1 Time weighted return Correct Answer [(1+HPY1)(1+HPY2)(1+HPY3)]^(1/n) - 1