I know all the allstars can derive formulas off the top of their head but I’d feel a little more comfortable route memorizing some formulas to fall back on or save time. Based on the number of questions you think will directly use the formula, what do you think the top 20 most important formulas are?
Any formula not marked optional is the first on my list.
Oyster Wrote: ------------------------------------------------------- > Any formula not marked optional is the first on my > list. haha
not top 20 but 2 off my head i can think of that you should know are sharpes ratio, diluted EPS, and EAR
Yea, you should probably learn them all…in the mocks I’ve done, almost all have come up in some fashion…I’d say these are important, of course not a complete list… - ROE and Dupont - Current/Quick/Cash Ratio - All the turnover ratios (AR, Inv, Payables) - Operating and Cash Conversion cycle - LIFO/FIFO formulas and how converting from one to the other affects COGS, NI, etc… - Dividend Discount/Sustainable Growth Models - Unlever/Relever Beta - CAPM - WACC - All the different yield measures (BEY, HPY, MMY, BDY, etc.) - Free Cash Flow Equity & Firm - Put Call Parity - All duration measures
thisisbrianly Wrote: ------------------------------------------------------- > Yea, you should probably learn them all…in the > mocks I’ve done, almost all have come up in some > fashion…I’d say these are important, of course > not a complete list… > > - ROE and Dupont > - Current/Quick/Cash Ratio > - All the turnover ratios (AR, Inv, Payables) > - Operating and Cash Conversion cycle > - LIFO/FIFO formulas and how converting from one > to the other affects COGS, NI, etc… > - Dividend Discount/Sustainable Growth Models > - Unlever/Relever Beta > - CAPM > - WACC > - All the different yield measures (BEY, HPY, MMY, > BDY, etc.) > - Free Cash Flow Equity & Firm > - Put Call Parity > - All duration measures Yeah, thats an important list. Also - Elasticity, Money multiplier, confidence intervals, Sharpe ratio, Leverage ratios
dasa Wrote: > Can you provide the elasticity equation…I could not find it. Price Elasticity of Demand = [(Change in Q)/(Average Q)]/[(Change in P)/(Average P)] Price Elasticity of Supply = Same as above, but you’re looking at quantity supplied, not quantity demanded. Cross Elasticity of Demand = (Percentage Change in Quantity DEMANDED)/(Percentage Change in Price of a Substitute or a Complement) Income Elasticity of Demand = (Percentage Change in Quantity DEMANDED)/(Percentage Change in Income) As a side note, elasticity is a units-free measure. Also, for CFA, when they say “percentage change in something,” in mathematical terms they mean: (Change in Something)/(Average Something)
For these ones just remember “quarter-pounder” that you want to eat. So change in Quantity first in numerator, then change in price in denominator Oyster Wrote: ------------------------------------------------------- > dasa Wrote: > > Can you provide the elasticity equation…I > could not find it. > > > Price Elasticity of Demand = [(Change in > Q)/(Average Q)]/[(Change in P)/(Average P)] > > Price Elasticity of Supply = Same as above, but > you’re looking at quantity supplied, not quantity > demanded. > > Cross Elasticity of Demand = > (Percentage Change in Quantity > DEMANDED)/(Percentage Change in Price of a > Substitute or a Complement) > > Income Elasticity of Demand = > (Percentage Change in Quantity > DEMANDED)/(Percentage Change in Income) > > > As a side note, elasticity is a units-free > measure. Also, for CFA, when they say “percentage > change in something,” in mathematical terms they > mean: (Change in Something)/(Average Something)
AndrewUNH Wrote: ------------------------------------------------------- > For these ones just remember “quarter-pounder” > that you want to eat. So change in Quantity first > in numerator, then change in price in denominator > > Good one! ha ha
The elasticity of supply, is it based on the selling price or the cost of producing the good ? I read that if substitutes are easily available or raw material are easily available, then the elasticity of supply for the good is relatively high. But at the same time the price elasticity of supply measures the change of quantity supplied in response to a change in price
if it is in the back of the Schweser notes, you guys should know it… the number crunshing in Level I is all about knowing your formulas, not much to it… so know ALL the ones in the back of Schweser, read them once in the morning and once at night now, and I am sure by exam time you will know them all and just remember if you get a question with a formula you don’t know, dont just random guess, think about the question, often you can use logic to determine a range of what the value should be, improve your chances from 0.333 to 0.5, and some times to 1! and that applies to any question, even the qualtitative questions, most of the times one of the answers can be elimiated even if you have never seen the CFAI books in your life good luck guys
Please anyone has the answer ? I just dig this post to avoid creating a new one. Thanks The elasticity of supply, is it based on the selling price or the cost of producing the good ? I read that if substitutes are easily available or raw material are easily available, then the elasticity of supply for the good is relatively high. But at the same time the price elasticity of supply measures the change of quantity supplied in response to a change in price
Miss*Yiota Wrote: ------------------------------------------------------- > Please anyone has the answer ? I just dig this > post to avoid creating a new one. Thanks > > The elasticity of supply, is it based on the > selling price or the cost of producing the good ? > > > I read that if substitutes are easily available or > raw material are easily available, then the > elasticity of supply for the good is relatively > high. > But at the same time the price elasticity of > supply measures the change of quantity supplied in > response to a change in price The elasticity of supply is based on price. If elasticity is high and price increases, the supply will increase by more. When you say that if substitute use for raw material is available, then elasticity is high, it means that if I can do something else with the raw material, and the price falls by little, I will use the raw material in the other thing so elasticity in response to the change in price is high. If I cannot do anything else with the raw material, I will still create the same thing even if I am getting less money for it so my supply is not very elastic in response to the decrease in the price.