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Formulas for CFA Level 1

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Front

Time Weighted Return (TWR)

Back

[Math: TWR = [( 1 + HPR_1) *( 1 + HPR_2)]^1/2 -1]

  • HPR1 = Holding period return 1

  • HPR2 = Holding period return 2

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Front

Real exchange rate (X/Y)

Back

[Math: RealExchangeRate \frac{X}{Y} = NominalExchangeRate \frac{X}{Y} * \frac{CPI_y}{CPI_x}]

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Front
Forward Rate Formula
Back
Forward Rate = Spot Rate + ( Forward Points × Decimal Multiplier ) Decimal Places in Quote | Multiply Forward Points By No decimals (e.g., 110) 1 2 decimals (e.g., 1.08) 0.01 3 decimals (e.g., 1.859) 0.001 4 decimals (e.g., 1.2749) 0.0001
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Front
Base Currency Formula
Back
You must invert first. Inverted Rate = 1 / Original Rate Percent Change = ( New Inverted / Old Inverted ) - 1
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Front
Holding Period Return (HPR)
Back
(P1 - P0 + D) / P0 P0 = price at the beginning of the period P1 = Price at the end of the period D = Dividends or income received during the period
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Front
Nominal exchange rate
Back
Nominal exchange rate = Real exchange rate × (CPI_X / CPI_Y)
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Quote Currency Formula
Back
Use the exchange rates as given. Percent Change = (New Rate / Old Rate) - 1
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Low Medium High Mastered
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Quote Currency Formula Quote/ Base = AUD/GBP
Back
Use the exchange rates as given. Percent Change = (New Rate / Old Rate) - 1
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Confidence Level
0%
Low Medium High Mastered
Front
Quote Currency
Back
Use the exchange rates as given. Percent Change = (New Rate / Old Rate) - 1
Tags
Confidence Level
0%
Low Medium High Mastered