McLeod81 Wrote: ------------------------------------------------------- > E(D1) = D0 + *(target D/E)*(1/T) This is unfamiliar to me. Where is this coming from?
slouiscar Wrote: ------------------------------------------------------- > Even though we all rightfully expect less calc and > more conceptual q’s… being able to recall a > formula helps me remember relationships and such. > I agree that being able to regurgitate a formula may help you with the intuition. My question is this: how do you delineate between which formula to memorize and which to “ignore”. It seems to me that most of the LOS that require a calculation don’t specify whether or not the formula will be provided. How do you handle this? Memorize every formula like at level I?
Zombie: You forget the expected increase in EPS for that formula. It comes from the Corp. Fin. book in the section about dividends.
altt1 Wrote: ------------------------------------------------------- > how do you delineate between which formula > to memorize and which to “ignore”. It seems to me > that most of the LOS that require a calculation > don’t specify whether or not the formula will be > provided. How do you handle this? Memorize every > formula like at level I? there are options besides memorize and ignore… and my goal is to ignore nothing. E(Div) = Div(t-1) + [E(increase in div) * target D/E * adjustment factor] where the adjustment factor = 1 / # of years
2-stage DDM = D0/r-g * (1+ g + t/2 [gS -g])
Today’s formula is… flow = change in exposure LC * (end - avg) hold = beg exposure in LC * ( end - beg) total = hold + flow all current exposure = SE temporal exposure = (cash + a/r) - (a/p + debt)
Single Monthly Mortality for MBS SMM=1-(1-CPR)^1/12
slouiscar Wrote: ------------------------------------------------------- > altt1 Wrote: > -------------------------------------------------- > ----- > > how do you delineate between which formula > > to memorize and which to “ignore”. It seems to > me > > that most of the LOS that require a calculation > > don’t specify whether or not the formula will > be > > provided. How do you handle this? Memorize > every > > formula like at level I? > > there are options besides memorize and ignore… > and my goal is to ignore nothing. > Agreed–which is why I put “ignore” in quotes in my original post. So my Q is the same: how do you handle LOS that ask you to calculate: memorize the eq’n or not?
You could try and understand the equation so if you do not memorize it, you can reconstruct it.
Active Return/Tracking Error = R(portfolio) - R(benchmark) Active Risk/Tracking Risk = {Sum(Rportfolio - Rbenchmark)}/n - 1 Information Ratio = {R(portfolio) - R(benchmark)}/std{(R(portfolio) - R(benchmark)}
E = mc^2
Which reminds me for Active/Tracking risk, the numerator should be squared and the whole fraction square rooted. My mistake
Single Monthly Mortality for an auto ABS SMM=Absolute Prepmt speed or ABS / 1-[ABS * (m-1)]
What if find useful is to try and understand all i can understand from reading the materials. As i solve questions through the text book and Pro, some how there is a sense in which the questions are directed at certain formuale more than others; some formulae are more fundamental than others like the price multiples for eg. I then resolve to memorise those. as for the others like Black-Scholes, I 'use the hang inwardrobe approach… grab them by the neck during the crucal final weeks.