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  • Formula of Portfolio Mgt.

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    rifat Alam
    17 visualizzazioni1 pagina
    This document defines key financial terms used to calculate investment returns and risks including: rate of return, holding period return, expected return, variance, standard deviation, coefficient of variation, equivalent taxable yield, after tax yield, leverage factor, and profit calculations. It also provides formulas to calculate inflation rates, risk-free rates of return, and margin requirements.

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    Formula sheet

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    This document defines key financial terms used to calculate investment returns and risks including: rate of return, holding period return, expected return, variance, standard deviation, coefficient of variation, equivalent taxable yield, after tax yield, leverage factor, and profit calculations. It also provides formulas to calculate inflation rates, risk-free rates of return, and margin requirements.

    Copyright:

    © All Rights Reserved
    Scarica in formato PDF, TXT o leggi online su Scribd
    Segnala contenuti inappropriati
    17 visualizzazioni1 pagina

    Formula of Portfolio Mgt.

    Caricato da

    rifat Alam
    This document defines key financial terms used to calculate investment returns and risks including: rate of return, holding period return, expected return, variance, standard deviation, coefficient of variation, equivalent taxable yield, after tax yield, leverage factor, and profit calculations. It also provides formulas to calculate inflation rates, risk-free rates of return, and margin requirements.

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    © All Rights Reserved
    Scarica in formato PDF, TXT o leggi online su Scribd
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    di 1

    Chapter 1

    𝐸𝑛𝑑𝑖𝑛𝑔 𝑉𝑎𝑙𝑢𝑒 𝑜𝑓 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡+𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑


    HPR=
    𝐵𝑒𝑔𝑖𝑛𝑖𝑛𝑔 𝑉𝑎𝑙𝑢𝑒 𝑜𝑓 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡

    HPY= HPR- 1
    Expected Return= ∑ (Probability of Return) × (Possible Return)
    Variance= ∑ (Probability) × (Possible Return- Expected Return)
    Standard Deviation= √𝑉𝑎𝑟𝑖𝑎𝑛𝑐𝑒
    𝑆𝑡𝑎𝑛𝑑𝑎𝑟𝑑 𝐷𝑒𝑣𝑖𝑎𝑡𝑖𝑜𝑛 𝑜𝑓 𝑅𝑒𝑡𝑢𝑟𝑛
    Coefficient of Variation (CV) =
    𝐸𝑥𝑝𝑒𝑐𝑡𝑒𝑑 𝑅𝑎𝑡𝑒 𝑜𝑓 𝑅𝑒𝑡𝑢𝑟𝑛

    NRFR= [(1+RRFR) × (1+ Expected Rate of Inflation)] -1


    1+𝑁𝑅𝐹𝑅 𝑜𝑓 𝑅𝑒𝑡𝑢𝑟𝑛
    RRFR= [ ]–1
    1+ 𝑅𝑎𝑡𝑒 𝑜𝑓 𝐼𝑛𝑓𝑙𝑎𝑡𝑖𝑜𝑛

    𝐸𝑛𝑑𝑖𝑛𝑔 𝑉𝑎𝑙𝑢𝑒−𝐵𝑒𝑔𝑖𝑛𝑖𝑛𝑔 𝑉𝑎𝑙𝑢𝑒


    Rate of Inflation=
    𝐵𝑒𝑔𝑖𝑛𝑖𝑛𝑔 𝑉𝑎𝑙𝑢𝑒

    Chapter 2
    After Tax Yield= Before tax Yield (1- tax)
    𝑀𝑢𝑛𝑖𝑐𝑖𝑝𝑎𝑙 𝑌𝑖𝑒𝑙𝑑
    Equivalent Taxable Yield (ETY) =
    1−𝑀𝑎𝑟𝑔𝑖𝑛𝑎𝑙 𝑇𝑎𝑥 𝑅𝑎𝑡𝑒

    Chapter 3
    𝐸𝑞𝑢𝑖𝑡𝑦
    Rate of Return= –1
    𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑛𝑒𝑡
    𝑃𝑟𝑜𝑓𝑖𝑡
    Rate of Return=
    𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑛𝑒𝑡
    1
    Leverage Factor =
    𝑀𝑎𝑟𝑔𝑖𝑛 𝑅𝑒𝑞𝑢𝑖𝑟𝑒𝑚𝑒𝑛𝑡

    𝑀𝑎𝑟𝑘𝑒𝑡 𝑉𝑎𝑙𝑢𝑒−𝐷𝑒𝑏𝑖𝑡 𝐵𝑎𝑙𝑎𝑛𝑐𝑒


    Margin=
    𝑀𝑎𝑟𝑘𝑒𝑡 𝑉𝑎𝑙𝑢𝑒

    Profit (in case of Buying) = Ending Value - Beginning Value + Dividend – Transaction
    Cost

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