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Unformatted text preview: Q uoted B I D PR ICE
996.25(100/1000)=99.625=99+(.625*32/32)=99_(20/32)=99:20
Rverse
102:12=(102+12/32)*(1000/100)=1023.75
Taxable equivalent yield for municipal bond yields
R=[r(m/m)]/(128%)
After tax retu rn to corporate investor after 70% exclusion:
P retax rate of retu rn(pretax r r *.30)*tax bracket
After tax retu rn to individual investor:
P retax r r *(1tax bracket)
After tax yield: % bond yield(1ma rginal tax rate)
P r icewieghted index: add up stock p rices nd divide by the #
companies
Value weighted index:
Explicit Cost of I PO: 7%
M ax Gain=proceeds(stock p rice*number of shares)min possible
r eplacement cost(stock p rice*0)
M a rgin Call:
Pu rchase(If stock drops below)=pr ice per share*[(1initial margin)/
(1maintenance margin)]
Sell(shortsell)=[price per share+margin required(pr ice per share)]/
(1+maintenance ma rgin)
I nvestors Rate of retu rn: Commision: commission on stock purchase+(# of round lots in
100s*commission per share)
NAV(net asset value)=(assetsliabilities)/shares
Low load mutual funds front end loads of no more than 3%
Rate of Retu rn of a Fund
1.Find NAV for year 0
2.Find NAV for yr 1: assetsassets(total expense ratio)liabilities/shares
3.Gross Retu rn: [NAV1NAV0+(income distribution+capital gains
d istr ibutions per share)]/NAV0
Funds tu rnover: assets bought nd sold over time/total assets
o utstanding
D ividends Yield:
1.P rice per share= (assetsliabilities)/shares
2.Dividends yield=dividends/price per share
M in annual ra te of retu rn(fund)
r> retu rn from bank+annual espense ratio+annual 12b1 fee
H P R: I nvestment growth rate+(dividends/initial capital for
i nvestment)
Annual percentage Rate of retu rn on Tbill
[(par valueamount paid)/amount paid](12/amount of months to
m atu rity) ...
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 Spring '11
 Prof.staff

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