QM - Formulas

Question 1

Components of Interest Rates

Answer 1

Question 2

Sample Mean

Answer 2

Question 3

Geometric Mean Return

Answer 3

The geometric mean is often used to compute the average rate of return over a series of periods or to calculate the growth rate.

Question 4

Harmonic Mean

Answer 4

Question 5

Holding Period Return (HPR)

Answer 5

Question 6

(IRR) Internal Rate of Return (Money-Weighted Return) (IRR)

Answer 6

Question 7

Continuously Compounded Return (‘1’ Holding Period)

Answer 7

Question 8

Continuously Compounded Return (‘T’ Holding Periods)

Answer 8

Question 9

Present Value (Lump Sum; More Than One Compounding Period Per Year)

Answer 9

Question 10

Annualized Return

Answer 10

Question 11

Leveraged Return

Answer 11

Question 12

Future Value (Lump Sum)

Answer 12

Question 13

Future Value (Continuous Compounding)

Answer 13

Question 14

Present Value (Lump Sum)

Answer 14

Question 15

Present Value (Continuous Compounding)

Answer 15

Question 16

Present Value (Ordinary Annuity)

Answer 16

Question 17

Present Value (Perpetuity)

Answer 17

Remember! PV of perpetuity is always one period before the first payment!

Question 18

Bond Price (Using Market Discount Rate)

Answer 18

Question 19

Dividend Discount Model (General Formula)

Answer 19

Question 20

Dividend Discount Model (Investment Horizon: 1 Year)

Answer 20

Question 21

Dividend Discount Model (Investment Horizon: “n” Years)

Answer 21

Question 22

Gordon Growth Model (Value)

Answer 22

Question 23

Intrinsic Value in Year “0” (Two-Stage Dividend Discount Model)

Answer 23

Question 24

Geometric Mean

Answer 24

The geometric mean (G) is always less or equal to arithmetic mean (A) and greater or equal to harmonic mean (H):
H≤G≤A

Question 25

Position of Percentile

Answer 25

Question 26

Mean Absolute Deviation (MAD)

Answer 26

Question 27

Sample Variance

Answer 27

Variance is the mean of the squared deviations of individual observations around the mean.

Question 28

Sample Standard Deviation

Answer 28

Question 29

Sample Target Semideviation

Answer 29

Question 30

Coefficient of Variation

Answer 30

Question 31

Sample Covariance (Definition)

Answer 31

Question 32

Sample Correlation Coeficient

Answer 32

Question 33

Expected Value

Answer 33

Question 34

Definition of Variance

Answer 34

Question 35

Variance of Random Variable (With Probability)

Answer 35

Question 36

Conditional Expected Value

Answer 36

Question 37

Total Probability Rule (Expected Value)

Answer 37

Question 38

Bayes' Formula

Answer 38

Question 39

Portfolio Expected Return

Answer 39

Question 40

Definition of Covariance

Answer 40

Question 41

Portfolio Variance (3 Assets)

Answer 41

Question 42

Portfolio Variance ('n' Assets)

Answer 42

Question 43

Covariance (Using Joint Probability Function)

Answer 43

Question 44

Safety-First Ratio

Answer 44

Question 45

Standard Normal Random Variable

Answer 45

Question 46

Continuously Compounded Return ('1' Holding Period)

Answer 46

Question 47

Variance ('T' Holding Periods; Continuously Compounded Return)

Answer 47

Question 48

Continuously Compounded Return ('T' Holding Periods)

Answer 48

Question 49

Standard Error of Sample Mean

Answer 49

Question 50

Sample Variance

Answer 50

Question 51

Confidence Interval for Population Mean (Normal Distribution)

Answer 51

Question 52

Confidence Interval for Population Mean (t-Distribution)

Answer 52

Question 53

Standard Error of Sample Mean (Bootstrapping)

Answer 53

Question 54

Test Statistic

Question 55

Standard Error of the Sample Mean

Question 56

Test Statistic for Hypothesis Tests Concerning Single Population Mean (t-Distribution)

Question 57

Test Statistic for Hypothesis Tests Concerning Single Population Mean (z-Test)

Question 58

Test Statistic for Hypothesis Tests of the Difference Between Two Population Means (Samples Independent; Variances Assumed Equal but Unknown; Normally Distributed Populations) Add notestar content check off when done

Question 59

Standard Error of Mean Difference

Question 59

Test Statistic for Hypothesis Tests of the Difference Between Two Population Means (Samples Independent; Variances Assumed Unequal and Unknown; Normally Distributed Populations)

Question 60

Sample Mean Difference

Question 61

Sample Variance of Differences

Question 62

Test Statistic for Hypothesis Tests Concerning Mean Difference (Normally Distributed Populations, Unknown Population Variances)

Question 63

Test Statistic for Hypothesis Tests Concerning Value of Population Variance (Normally Distributed Population)

Question 64

Test Statistic for Hypothesis Tests Concerning Differences Between Variances of Two Normally Distributed Populations