formula sheet for the 1st midterm

# formula sheet for the 1st midterm - Formula Sheet CH5 1...

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Formula Sheet CH5: 1. Lump-sum FV : FV N = PV(1 + I) N 2. Lump-sum PV: PV = FV N ( 1 + I ) N 3. FV of an ordinary annuity: FV N = PMT [ ( 1 + I ) N 1 I ] 4. FV of an annuity due: FV due = FV ordinary ( 1 + I ) 5. PV of an ordinary annuity: PV 1 + I ¿ ¿ ¿ 1 1 ¿ ¿ PMT I ¿ 6. PV of an annuity due: PV due = PV ordinary ( 1 + I ) 7. Lump-sum FV under more frequent compounding: FV N = PV(1+ I M ) NM 8. Effective (or equivalent) annual rate: = (1+ I NOM M ) M -1 CH6: 1. T-bond yield t = r t ¿ + IP t + MRP t 2. Corporate bond yield t = r t ¿ + IP t + MRP t + DRP t + LP t 3. t t LP DRP yield bond Treasury yield bond Corporate spread yield bond Corporate CH7:

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1. Bond value at time 0 (annual coupon payment): N N d d d r 1 M ] r 1 1 1 [ r INT value Bond 2. Bond value at time t (annual coupon payment): t N t N
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