Exam FM/2 Interest Theory Formulas



Similar documents
EXAMPLE EXAMPLE EXAMPLE EXAMPLE 4 UNIVERSAL TRADITIONAL APPROACH EXAMPLE 5 FLEXIBLE PRODUCT... 26

ACTUARIAL ANALYSIS OF THE MULTIPLE LIFE ENDOWMENT INSURANCE CONTRACT

American Journal of Business Education September 2009 Volume 2, Number 6

Put the human back in Human Resources.

Sequences and Series

Outline. Numerical Analysis Boundary Value Problems & PDE. Exam. Boundary Value Problems. Boundary Value Problems. Solution to BVProblems

How To Get A Pension In Chile

B I N G O B I N G O. Hf Cd Na Nb Lr. I Fl Fr Mo Si. Ho Bi Ce Eu Ac. Md Co P Pa Tc. Uut Rh K N. Sb At Md H. Bh Cm H Bi Es. Mo Uus Lu P F.

REVISTA INVESTIGACION OPERACIONAL Vol. 25, No. 1, k n ),

ON YOUR TURN: ROLLING AND MOVING

Campus Sustainability Assessment and Related Literature

Chapter 4 Multiple-Degree-of-Freedom (MDOF) Systems. Packing of an instrument

SCO TT G LEA SO N D EM O Z G EB R E-


File:Dell Printer Tech Support Number Dell Printer Customer Support Number Dell Prin. ter Tech Support Phone Number.

Standardized Formula Sheet: Formulas Standard Normal Distribution Table Summary of Financial Ratios

s in? sure? not dufferinwaste Try searching the What Goes Where directory, available at dufferincounty.ca/waste or on the my-wastetm app

Selected Financial Formulae. Basic Time Value Formulae PV A FV A. FV Ad

1. The Time Value of Money

HR DEPARTMENTAL SUFFIX & ORGANIZATION CODES

Markit iboxx USD Liquid Leveraged Loan Index

The Term Structure of Interest Rates


Overview of Spellings on

1.- L a m e j o r o p c ió n e s c l o na r e l d i s co ( s e e x p li c a r á d es p u é s ).

= i δ δ s n and PV = a n = 1 v n = 1 e nδ

Chem 115 POGIL Worksheet - Week 4 Moles & Stoichiometry Answers

CHAPTER 2. Time Value of Money 6-1

The Time Value of Money

AN EVALUATION OF SHORT TERM TREATMENT PROGRAM FOR PERSONS DRIVING UNDER THE INFLUENCE OF ALCOHOL P. A. V a le s, Ph.D.

Proving the Computer Science Theory P = NP? With the General Term of the Riemann Zeta Function

Positive Integral Operators With Analytic Kernels

16. Mean Square Estimation

Circle Geometry (Part 3)

Information on the types of mortgages available for purchasing a residential property

Numerical Solution of the Incompressible Navier-Stokes Equations

Generalized Difference Sequence Space On Seminormed Space By Orlicz Function

Valuation Methods of a Life Insurance Company

Chapter 04.00E Physical Problem for Electrical Engineering Simultaneous Linear Equations

EXECUTIVE SUMMARY. Survey Objective. How to Use This Report. Methodology

Curve Fitting and Solution of Equation

10.5 Future Value and Present Value of a General Annuity Due

JCUT-3030/6090/1212/1218/1325/1530

With Rejoicing Hearts/ Con Amor Jovial. A Fm7 B sus 4 B Cm Cm7/B

Using Predictive Modeling to Reduce Claims Losses in Auto Physical Damage

I n la n d N a v ig a t io n a co n t r ib u t io n t o eco n o m y su st a i n a b i l i t y

PP t c. d d. d b d d d d d c d d c d -c. d d. d d. d`d i

EXAMPLE PROBLEMS SOLVED USING THE SHARP EL-733A CALCULATOR

Classic Problems at a Glance using the TVM Solver

Online Department Stores. What are we searching for?

Mr. Kepple. Motion at Constant Acceleration 1D Kinematics HW#5. Name: Date: Period: (b) Distance traveled. (a) Acceleration.


Frederikshavn kommunale skolevæsen

ACE-1/onearm #show service-policy client-vips

All answers must use the correct number of significant figures, and must show units!

2016 Wiley. Study Session 2: Quantitative Methods Basic Concepts


Auburn University Style Guide & Identification Standards Manual


PREMIUMS CALCULATION FOR LIFE INSURANCE


7.2 Analysis of Three Dimensional Stress and Strain

Chem 115 POGIL Worksheet - Week 4 Moles & Stoichiometry

Critical Approach of the Valuation Methods of a Life Insurance Company under the Traditional European Statutory View

5;<.c,4 l/lj. ~l/ ~s. ~4 1 /. &Lf '73. i ~ 30~. :il 4

FINANCIAL MATHEMATICS 12 MARCH 2014

Jesus Performed Miracles

CANKAYA UNIVERSITY FACULTY OF ENGINEERING MECHANICAL ENGINEERING DEPARTMENT ME 212 THERMODYNAMICS II HW# 11 SOLUTIONS

BERGEN COMMUNITY COLLEGE DIVISION OF BUSINESS, PERFORMING ARTS AND SOCIAL SCIENCES BUSINESS DEPARTMENT

L a h ip e r t e n s ió n a r t e r ia l s e d e f in e c o m o u n n iv e l d e p r e s ió n a r t e r ia l s is t ó lic a ( P A S ) m a y o r o

Generator stability analysis - Fractional tools application

B A S I C S C I E N C E S

H ig h L e v e l O v e r v iew. S te p h a n M a rt in. S e n io r S y s te m A rc h i te ct

Terminology for Bonds and Loans

i n g S e c u r it y 3 1B# ; u r w e b a p p li c a tio n s f r o m ha c ke r s w ith t his å ] í d : L : g u id e Scanned by CamScanner

Released Assessment Questions, 2015 QUESTIONS

Book of Plans. Application for Development Consent. Thames Tideway Tunnel Thames Water Utilities Limited. Application Reference Number: WWO10001

Paper Technics Orientation Course in Papermaking 2009:


int Ron t Marc ier rise e la Impasse du u Liv oue re M lin Berthel ry roix Fleu m Clos inot s int V urg S Faub Rue Rue du C rc de l ' Etuv e Stuart

excellence in ever y sear c h we conduct. Biophar maceuticals Sales & Mar keting Human Resour ces


Summation Notation The sum of the first n terms of a sequence is represented by the summation notation i the index of summation

Mathematics. Vectors. hsn.uk.net. Higher. Contents. Vectors 128 HSN23100

T c k D E GR EN S. R a p p o r t M o d u le Aa n g e m a a k t o p 19 /09 /2007 o m 09 :29 u u r BJB M /V. ja a r.

Child Care Resource Kit celebrate relationships!

[ csak. csak2. csak1 NYERŐÁR. csak3

Bishaash. o k j. k k k k k j. k k. k k k e j k k k j k k k j. - one's ask - ing if I know the spell - ing of "Help"...

tis, cis cunc - cunc - tis, cis tis, cis cunc - tis, func - def - def - tis, U func - def - func - tis, pa - tri pa - tri pa - tri tu - per - tu -

Time Value of Money. First some technical stuff. HP10B II users

G.GMD.1 STUDENT NOTES WS #5 1 REGULAR POLYGONS

- Models: - Classical: : Mastermodel (clay( Curves. - Example: - Independent variable t

V e r d e s I s t v á n a l e z r e d e s V Á L T O Z Á S O K. F E L A D A T O K. GONDOK A S O R K A TO N A I

CLASS TEST GRADE 11. PHYSICAL SCIENCES: CHEMISTRY Test 6: Chemical change

grow scouting s impact.

pon r tt p 1110 voni fj AiPe f r Januar 1905 g ro b SEP i ij Hadla t on 5 lit I arut obenbergo von b0 enberg zi i y ro I 6 rt ut b tq

In English there are 26 letters which represent 44 phonemes. These phonemes are represented by approximately 140 different letter combinations.

Stock Profit Patterns

Fr ag m e n tac i ó n y c o m p l e j i da d: a n á l i s i s d e l c a m b i o

T = 1/freq, T = 2/freq, T = i/freq, T = n (number of cash flows = freq n) are :

Transcription:

Exm FM/ Iere Theory Formul by (/roprcy Th collboro of formul for he ere heory eco of he SO Exm FM / S Exm. Th uy hee free o-copyrghe ocume for ue g Exm FM/. The uhor of h uy hee ug ome oo h uque o h o ego wll repe. Ech ego h oly oe meg hroughou he hee.

Fumel of Iere Theory Tme Vlue of Moey FV V + V FV + ( + ( + ( The mou l eme of grow o by me ( The mou l eme of grow o by me l ( e + l( + e + + δ l( + δ e δ ( + e δ ( ( ( e δ ( u u ( δ e u u ( Effece ere re wh oml re coerble m-hly m + m Effece cou re wh oml re Noml Re Equlece p ( p p ( p coerble p-hly m ( p p δ + + e m p

Effece ul re urg he -h yer ge by: mou ere begg mou ( ( ( ( Noe h he -h yer ge by he me pero [,] Therefore, he ere ere urg he -h yer ge by: ( ( For equle meure of ere we he he followg relohp: ( 3 ( 3 < < < < δ < < < < ue uy Immee pyme re me he e of he pero uy Due pyme re me he begg of he pero uy Immee + + + ( + + ( + ( + + + ( + uy Due + + + ( + + ( + + + ( + ( + ( + Iee for uy Immee uy Due ( + ( + + +

erpeuy 3 lm + + + lm ouou ue V δ δ ( ( + δ δ δ u u δ( u u e p FV e p where p pyme fuco ( Icreg ue yme re,,, ( I ( I ( I ( + ( I ( I ( + ( I ( I ( I ( + ( I ( I lm( I + ( I lm( I Decreg ue yme re, -,,, ( D ( D ( D ( + ( D ( + ( D ( + ( D ( D ( + ( D ree Vlue of he uy wh erm X, X + Y, X + Y,, X + ( Y X + Y ree Vlue of he perpeuy wh erm X, X + Y, X + Y, X Y +

ue wh Term Geomerc rogreo (, +, + q,, + q q 3 ree Vlue V + ( + q + ( + q + + ( + q ( + q q Ueful Iee m + ( + m ( D + ( I ( + + + + ( + ( + + If he ere re re: + + + ( ( + + + If he compoug frequecy of he ere excee he pyme frequecy of yer Ue equle ere re oer yer: j ( + If he pyme frequecy excee he compoug frequecy of he ere ( Ue m-hly uy ( Ue equle ere re effece oer he pyme pero: ( j + m j j j j If he pyme re,,, m m m I If he pyme re,,, m m m, he he pree lue, he he pree lue m m m m I

o Repyme morzo morzo Meho whe pyme me, mu be fr pple o py ere ue he y remg pr of he pyme pple o py prcple Noo mou of he lo umber of pyme pero mou of leel pyme he e of he pero (morze pyme ( lo pyme me effece ere re per pyme pero B blce me, blce fer -h pyme. Noe h B prcple p pyme ( I ere p pyme ( Ueful Equo for eel yme ropece Meho B + Reropece Meho B ( B B + + ( + + + I + I B ( I + Ueful Equo for No-eel yme + + + ( B + + + + B + ( ( + ( I B ( I B B

o Repyme Sg Fu Sg Fu o (SF ccumule moey epre fu by mg pyme, o o he regulr ere pyme, eery pero. Noo j mou of he lo umber of pyme pero effece ere re per pyme pero by he borrower o he leer effece ere re ere by he borrower he g fu D S peroc g fu epo (SFD, ume o be leel S peroc ouly by he borrower ere pyme o leer + SFD S g fu blce fer -h epo e lo blce me Ueful Equo D S j D S j + D + S S j j DS j DS j j S Ne rcpl S S D D D ( j S + j S j S Ne Iere js jd S j Noe o o morze o oer me ere p ecree prcpl p cree SF for ech ouly ere p o leer co Illme o oer me ere p ecree whle he prcpl p co

Bo Bo ere berg ecure; bclly lo from leer perpece llble Bo bo h c be p off (clle before mury Noo F r Fr pr lue coupo re (ere re of bo coupo mou (pyme o leer reempo lue (uully F BV umber of coupo pero o mury mre prce of he bo boo lue of he bo (bo morze blce fer -h pyme yel per pero o eor prce + K ree lue of he reempo lue Fr g mofe coupo re remum If > r he he bo prce premum. >, he mou of he premum. remum ( Fr ( + + + + + ( + + + ( + ( + + Dcou If < r he he bo prce cou. <, he mou of he cou Dcou ( Fr r If r he bo ellg he prce we y h ell pr.

rce remum-dcou Formul Fr + K ( + ( g f Bo morze BV Fr + BV F, he F + ( r m m BVm + Fr Fr I + I BV + + ( Fr + Fr + + If F, he + ( + Wre-Up urg he fr yer (Dcou Wre-Dow urg he fr yer (remum BV BV Wre-Up/Wre-Dow geerl urg me m o me, WD ( Fr + WU ( Fr + Mehm Formul g K + ( K f r F, he K + ( F K > BV BVm Mury o ue rcg llble Bo Type of Bo remum Bo Dcou Bo Te N ug Erle oble Reempo De e oble Reempo De rce Bewee yme De umber of y from l coupo e o eleme e umber of y he bo pero rce lu ccrue + ccrue Iere ( Fr lu ccrue ccrue Iere ( + ( Fr rce

Yel Re of Ieme Ierl Re of Reur (IRR he re of ere whch he pree lue of ll mou ee equl o he pree lue of ll he mou p bc o he eor Ierl Re of Reur (IRR Ge eme ch flow,,,,, he IRR oluo for of he equo + + + or + + + + + ( + ( + ( + Tme Weghe Re of Iere (TWR orbuo me B Fu lue me before he corbuo me j + Effece re oer [, ] B B + j TWR + ( + j ( + j ( + j m Dollr Weghe Re of Iere (DWR B I Il fu blce Fl fu blce Iere ere orbuo or whrwl me (ch flow Ne Ne corbuo Ne B + Ne + I I B Ne DWR I +

Term Srucure of Iere Re Spo Re Deoe by he -yer po re ( The ul ere re o he -yer Treury STRI clle he -yer po re, he ere of po re oer me clle he yel cure. ( To lue bo, e he pree lue of ech pyme he ppropre yel cure re um he pree lue. ( ( + + + + + + + + + + ( + + f f f ( + f (3 Oce we he fou he prce of bo ug he yel cure we c f he yel o mury he co yel o he bo h prce. For exmple urchg bo wh coupo h ch flow ge by, (,,, ( If pyme (,,, ( re o leel Ug he B-II lu. F Worhee Se Fo, (,,, N (. IRR T o Yel o he Bo IRR If pyme (,,, ( re leel Ug he B-II lu. TVM Worhee Se V, N, MT (, FV. I/Y T o Yel o he Bo I/Y Forwr Re Deoe by f he yer forwr re The re gree upo oy for oe-yer lo o be me yer he fuure + f ( + ( + ( + ( + f ( +

Duro Duro meure of ey of fcl e o chge ere re Ieme h Flow,,, Ieme rce + + + Wegh for Mculy Duro Mculy Duro w > ( + + + D w + w + + w M Mofe Duro D ( DM + > > > Duro of eel yme Ieme D ( I Mculy Duro of coupo bo wh fce lue F coupo Fr for pero reempo lue Fr( I + DM Fr + The Duro of Zero-oupo Bo pyble pero Mofe Duro of orfolo wh Ieme D W D + To + WD + WD where X W X X + X + + X oexy pproxmo hge of rce oexy Eme ( ( Δ + ( ( ( Δ + Δ hge rce Δ Δ ( + Δ ( Δ + Δ Δ ( D ( Δ ( Δ D ( Δ + Δ

Immuzo Noo ( ree Vlue of e e mou me ( ree Vlue of ble bly mou me S ( Surplu S ( ( ( oo for Immuzo To chee mmuzo we mu he S, S (, S ( > Immuzo erm of uro coexy we ee o o o ( V Mchg ( o o ( Duro Mchg ( ( (3 Greer oexy for e ( > ( Immuzo erm of he e lbly mou me ( V Mchg ( Duro Mchg (3 Greer oexy for e > > > > > >

Specl e Yel Re Reeme Noo y j ul yel of ol eme (IRR umber of yer umber of pyme effece ere fu X effece ere fu Y Geerl e Suppoe you me l eme of. The yel re y he cul re of reur you re receg o he eme. V he ccumule lue of your eme. + y V Suppoe you re eg pyme o fu X he e of ech pero reeg he ere ccrue ech pero o fu Y ( + + y I y y j V of l eme V of reeme Suppoe you me l eme of o fu X You ree ere ccrue fu X fer ech pero o fu Y rg You ree ere ccrue fu Y fer ech pero o fu Z rg Bo Reeme ( + + + y I X Y X Z Sum of prcpl ere fer pero + y + + I X Y X Th refer o he ce where we he bough bo for prce of Fr + K we ree he coupo pyme Fr o epre ccou he me hey re recee. Noo Z y ul yel of ol eme umber of yer umber of pyme he bo py

Fr + he V of he ccou he prce he l eme. y + + ( y Fr + ( + y m m Fr Fr + + K Of coure we c he more h oe bo ole. If h he ce we ju ee o combe prce coupo pyme ccorgly. Mchg ble Ug Bo We re gog o coer he ce h lbly frequecy mche he coupo frequecy. (e.g. We woul o he lble yer yer wh coupo emully. e F, r eoe he pr lue, coupo re reempo lue, repecely, for he bo wh he loge uro. Deoe F, r for he bo wh he ex loge uro, o o. Sep- urche F r + of he bo. Th percege. Sep- Th ge F r, frcol mou of he coupo he pero before. F r + Sep 3- Deerme he mou lef we ee o mch. Sep 4- urche F r F r + F r + rce of he bo o mch lble : lble me me. Sup Yel ure Suff of he bo. Fr F r F r + Fr + + Fr + Fr +. Th mche ( To lue bo, e he pree lue of ech pyme he ppropre yel cure re um he pree lue. ( ( + + + + + + + + + + ( + + f f f ( + f