incorrect cards (0)
correct cards (0)
remaining cards (0)
retry
restart
shuffle
help
0:01
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.
Normal Size Small Size show me how
Normal Size Small Size show me how
CFA R5
| Question | Answer |
|---|---|
| Interest Rate (r) | Real Risk Free Interest Rate + Inflation Premium + Default Premium + Liquidity Premium + Maturity Premium |
| Nominal Risk-Free Interest Rate | Real risk-free interest rate + Inflation Premium |
| Future Value - Single Cash Flow in 1 year (Formula) | FV = PV(1+r) where PV=Present Value FV=Future Value r = rate of interest per period or stated annual iterest rate |
| Future Value Compounding (Annual) - Single Cash Flow in N years (Formula) | FV = PV(1+r)^N where PV=Present Value FV=Future Value r = rate of interest per period or stated annual iterest rate (as decimal) N=Number of compounding periods (Annual) |
| Future Value Compounding other than Annual - Single Cash Flow in N years (Formula) | FV = PV(1+r/m)^mN where PV=Present Value FV=Future Value r = rate of interest per period or stated annual iterest rate (as decimal) N=Number of compounding periods (Annual) m=Number of compounding periods in one year |
| Future Value Continuous Compounding | FV = PV(e)^rN where PV=Present Value FV=Future Value r = rate of interest per period or stated annual iterest rate (as decimal) N=Number of compounding periods (Annual) m=Number of compounding periods in one year e=2.7182818 |
| Effective Annual Rate (EAR) - only rates | EAR = (1+r/m)^m - 1 where r = rate of interest per period or stated annual iterest rate (as decimal) m=Number of compounding periods in one year |
| Effective Annual Rate (EAR) - rate, PV & FV | EAR = (FV / PV)^1/N - 1 where PV=Present Value FV=Future Value r = rate of interest per period or stated annual iterest rate (as decimal) N=Number of years |
| Effective Interest Rate (EIR) - rate, PV & FV - Other than annual compounding frequency (i.e. monthly, quarterly, & semiannually) | r = [(FV / PV)^1/mN - 1] m where PV=Present Value FV=Future Value r = rate of interest per period or stated annual iterest rate (as decimal) N=Number of years m=Number of compounding periods in one year |
Created by:
vgjr
on 2011-08-07