Equations

Question 1

Interest yield for a bond

Answer 1

(Coupon x 100)
—————————————
clean price

Question 2

Gross redemption yield of a bond

Answer 2

Interest yield + or -
gain or loss to maturity/ number of years
/
Clean price
X100

Question 3

Earnings per share

Answer 3

Profit after tax and preference dividends
/
Number of ordinary shares in issue

Question 4

Dividend yield

Answer 4

(Dividend per share / current share price) x 100

Question 5

Dividend cover

Answer 5

EPS/dividend per share

OR

Profit attributed to ordinary shareholders / dividends paid

Question 6

Earnings per share ratio

Answer 6

Current share price / EPS

Question 7

Net asset value

Answer 7

Net assets attributable to ordinary shareholders
/
number of ordinary shares in issue

Question 8

Gross rental yield

Answer 8

Annual rent received
/
(Purchase price + associated costs)
X
100

Question 9

Net rental yield

Answer 9

(Annual rent received - management fees)
/
(Purchase price + associated costs)
X
100

Question 10

Standard deviation range of return

Answer 10

Mean - and + standard deviation for each section

Question 11

CAPM expected return

Answer 11

(beta
X
The excess return of the market over the risk free return)
+
Risk free element

Question 12

Future value of money

Answer 12

(1 + interest rate)
X
To the power of the Period
X
Present value

Question 13

Effective annual rate for value

Answer 13

1 + interest rate / period
X power of period
- 1

Question 14

Present value of money

Answer 14

1 + interest rate
To the power of the term
X
Future value

Question 15

Gearing

Answer 15

Total gross assets / net assets x 100