# Formulas?!

What is your strategy on learning/memorizing all these formulas???

Hi, I shall be working on the formulae tonight. I will take the schweser formulae and memorize them. Some of them I know however I still need to list them and I do better start today. I am working on FSA at the moment Reading 26 and hoping to work on more questions and then to formulae. What is your strategy?

I keep thinking I have them down but there are so many of them I can not possibly remember all…and I start mixing them up reall bad…

I have to understand them. I can’t ever just memorize them.

I’m the same way MW. I always try to visualize what is actually happening in the formula. Take residual income for example, rather than memorize that formula, just think about step by step. The “extra” income I earn is the excess of what my investors require of me. So if my book value is 100, starting today and the required return is 10%, next year they require my book value to be 110. Anything on top of that is my “residual” income; hence, If I earn 20 dollars, my “residual” income is 10 dollars… RI= E(t)- (r*BookValue) I don’t know if that makes any sense at all… cheers

Drill with a spaced-repetition system and make up vivid imagery to memorize them. like mwvt9 said, you do need to understand them too.

LanceTX Wrote: ------------------------------------------------------- > I’m the same way MW. I always try to visualize > what is actually happening in the formula. Take > residual income for example, rather than memorize > that formula, just think about step by step. The > “extra” income I earn is the excess of what my > investors require of me. So if my book value is > 100, starting today and the required return is > 10%, next year they require my book value to be > 110. Anything on top of that is my “residual” > income; hence, If I earn 20 dollars, my “residual” > income is 10 dollars… RI= E(t)- (r*BookValue) > > I don’t know if that makes any sense at all… > cheers That was really nice. I think this is exactly what CFAi wants us to do…not cramming formulas - but can we do for most of the readings, given this big vignette and 3 min/qn ? Still knowing this way will always help if you forget the formula