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Cfa Level 1 Cheat Sheet

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Cfa Level 1 Cheat Sheet

Uploaded by

sanyam749
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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CFA Level 1
Cheatsheet
CFA
Level 1

Quantitative Methods • Time-weighted rate of return (TWR)

Time Value of Money


• Future Value (FV) of a single cash flow

• FV with multiple compounding periods


• Probability distribution within a normal distribution

• Present Value (PV) of a lump sum with multiple compounding periods

• FV of an ordinary annuity

Economics
• FV of an annuity due
Elasticity
• Own-price elasticity of demand

Market Returns
• Holding period return • Cross-price elasticity of demand

Methods of Calculating GDP

• Geometric mean return


Balance of Payments Accounts Corporate Issues

Weighted Average Cost of Capital (WACC)

Forward Rates, Points, Discounts, & Premiums

Internal Rate of Return

Financial Statement Analysis

Profitibility Ratios
Cost of Equity Using CAPM
• Gross profit margin

• Operating profit margin

Operating Cycle (OC) and Cash Conversion Cycle (CCC)


• Net profit margin

Days of inventory on hand (DOH): Number of days of inventory


Days of sales outstanding (DSO): Number of days of receivables
Days of payable outstanding (DPO): Number of days of payables
Liquidity Ratios
• Current ratio

Equity Investments
• Quick ratio
Price Multiples Commonly Used in Valuation
• Price-to-sales
• Cash ratio

• Price-to-revenue
• Interest coverage ratio

• Price-to-book
DuPont analysis

• Price-to-earnings

• Price-to-cash flow
Dividend Discount Model Yield to Maturity (YTM)

Gordon Growth Model


Macauley Duration

Annual Modified Duration

Dividend Payout Ratio & Long-Term Dividend Growth Rate

Approximate Modified Duration

Free Cash Flow to Equity (FCFE)

Derivatives

Minimum Prices of European & American Options

Fixed Income

Present Value of a Coupon Bond Put-call Parity

Value of a Zero-Coupon Bond Forward Price Based on Spot Price with Benefits & Costs
Portfolio Management Efficient Global Minimum Variance Portfolio

Portfolio Evaluation Measures


• Sharpe ratio • Treynor ratio

• M-squared • Jensen’s Alpha

Beta
The optimal risky portfolio is on the efficient frontier at the
tangency point where a straight line, originating from the risk-free
rate, touches the efficient frontier. The efficient frontier represents
all portfolios of risky assets in the investment opportunity set with
the highest expected return for a given level of risk. The efficient
frontier is the blue curved line. The global minimum variance is the
lowest risk portfolio on the efficient frontier.

Market Model
Capital Market Line vs Security Market Line

Efficient Frontier

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The efficient frontier represents all portfolios of risky assets in the


investment opportunity set with the highest expected return for Start Your FREE Level 1 Trial!

Finance.UWorld.com
a given level of risk. The global minimum variance portfolio is the
portfolio with the lowest risk on the efficient frontier. The efficient
frontier is the blue curved line.

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