Formulas not provided

Question 1

Housing Expenses (PITI)

Answer 1

Principal, Interest, Taxes and insurance / Gross Income

Question 2

Financial Needs

Answer 2

Cost of Attendance – Expected family Contribution

Question 3

Amount Paid By Insurance

Answer 3

[(Insurance carried / Insurance required) x Loss] – Deductible

Question 4

Insurance Basis

Answer 4

Premiums Paid – Dividends

Question 5

Taxable Income From Insurance Withdrawal/Loan

Answer 5

Net Cash Value
+ Existing Loan
– Basis

Question 6

Surrender Value

Answer 6

Cash Value – Existing Return x Payment

Question 7

Annuity Amount Excluded (Exclusion Ratio)

Answer 7

Amount Invested / Expected Return x Payment

Question 8

Exclusion Ratio

Answer 8

Amount Invested / Expected Return

Question 9

Bond Conversion Value

Answer 9

(Par / Conversion Price) x Current Market Price of underlying Stock

Question 10

Net Operating Income

Answer 10

Gross Rental Receipts
+ Non-rental income
- Vacancy and Collection losses
- Operating expenses

Question 11

Intrinsic Value of Property

Answer 11

NOI / Capitalization Rate

Question 12

Coefficient of Variation

Risk per unit of Return

Answer 12

Standard Deviation/Average of Mean

Question 13

Standard Deviation of two Variable Portfolio (Shortcut)

Answer 13

Sum of Standard Deviation / 2

Choose the next lowest answer

Question 14

Beta

Answer 14

(Correlation Coefficient x Standard Deviation of stock) / Standard deviation of Market

Question 15

Risk Adjusted Return

Answer 15

Fund’s Realized Return / Fund’s Beta

Question 16

Dividend Discount Model (Shortcut)

Answer 16

If 1st growth rate is lower than the second growth rate, calculate the price with 2nd growth rate and choose the next lowest answer

If 1st is higher than the second growth rate, calculate the price with the 2nd growth rate and choose the next highest answer

Question 17

Current Market Price

Answer 17

Earnings x P/E Ratio

Question 18

Price/Earnings Growth (PEG)

Answer 18

P/E Ratio / Annual EPS Growth

Question 19

Return on Equity

Answer 19

Earnings available for common (EPS) / Common equity (net worth of book Value)

Question 20

Dividend Payout Ratio

Answer 20

Common Dividends Paid / Earnings available for Common

Question 21

Information Ratio

Answer 21

(Asset Return – Return on Benchmark Asset) / Standard Deviation of the Asset Return

Question 22

Margin Formula

Answer 22

[(1 – Initial Margin %) / (1 – Maintenance Margin %)] x Purchase price of Stock

Question 23

Margin Formula (Shortcut)

Answer 23

Purchase Price x 2/3

Look for the next highest number

Question 24

Adjusted Gross Income

Answer 24

Gross Income – Adjustments

Question 25

Taxable Income

Answer 25

Adjusted Gross Income - Deductions - Exemptions

Question 26

Tax Liability

Answer 26

Taxable Calculation - Credits - Other Taxes

Question 27

Taxable Calculation

Answer 27

Taxable Income x Appropriate Tax Rates

Question 28

Net tax due / Refund

Answer 28

Tax liability - Quarterly Payments - Withholding

Question 29

Self Employment Tax (Shortcut)

Answer 29

Self-Employment Income x .1413 | Round Up

Question 30

Profit % for Installment Sale

Answer 30

Gross Profit Percentage = Profit / Total Contract Price

Question 31

Gain on Installment

Answer 31

Installment x Gross Profit Percentage

Question 32

Partnership Basis & S Corp. Basis

Answer 32

Partnership Basis: Cash Contributed + Direct loans made to partnership by partner + Loans made to partnership S Corp. Basis: Cash Contributed + Direct loans made to partnership by shareholder

Question 33

Adjusted Basis for Property

Answer 33

Cost Basis - Cost Recovery

Question 34

Realized Gain on Exchange

Answer 34

FMV of Property Sold + Boot Received - Adjusted basis of property to be sold - Boot Given

Question 35

Recognized Gain on Exchange

Answer 35

The lesser of realized gain or boot received

Question 36

Adjusted Basis of NEW Property

Answer 36

FMV of Property Received - Realized gain + Recognized gain

Question 37

Section 1245 Look Back

Answer 37

Lesser of Cost Recovery Deduction or Gain | Gain – Selling price – Basis

Question 38

Alimony Recapture

Answer 38

1st Year + 2nd Year – ( $37,500 +2 x 3rd Year)

Question 39

Excess Percentage (Social Security Integration)

Answer 39

Base Percentage + Permitted Disparity

Question 40

Self Employed Qualified Plan Contribution (15% & 25%)

Answer 40

Net Schedule C Income x 12.12% (15%) Net Schedule C Income x 18.59% (25%)

Question 41

Adjusted Gross Estate

Answer 41

Gross Estate - Funeral Expenses - Admin Expenses - Debts - Taxes - Casualty Losses

Question 42

Taxable Estate

Answer 42

Adjusted Gross Estate - Marital deduction - Charitable deduction

Question 43

Tax Base

Answer 43

Taxable Estate + Taxable Gifts

Question 44

Tentative Estate Tax

Answer 44

Tax Base - $ Exemption) x %

Question 45

Net Estate Tax

Answer 45

Tentative Tax – Gift taxes paid

Question 46

Market Risk Premium

Answer 46

Market Return – Risk Free Rate

Question 47

Stock Risk Premium

Answer 47

Market Risk Premium x Risk Free Rate

Question 48

Intrinsic Value of a Preferred Stock

Answer 48

Current annual dividend / Required Rate of Return

Question 49

Current Yield

Answer 49

Current Coupon / Current Selling Price

Question 50

Coefficient of Variation

Answer 50

Standard deviation of asset / Expected return of asset

Question 51

``` Geometric mean (Time weighted return) ``` Ex. Annual returns were 30%, 40%, -40% and -20%.

Answer 51

Add 1 and multiply 1.3 x 1.4 x -0.6 x -0.8 = 0.8736 ``` Shortcut FV 0.8736 N 4 PV -1 Solve for I/YR ```