Finance and Investment formula

perpetuity

C/r

Discounting

PV/(1+r)^T

Annuity

C/r - c/r(1+r)^T

NPV

-P + c/1+r + c/(1+r)^2 ...

IRR

NPV \= 0

Spot Rates

(1+R2)^2 \= (1+R1)(1+R1,2)

Modified Duration

Change in bond price / change in YTM

Macaulay duration

Modified duration * 1+YTM

Zero growth equity

D/r

Constant growth equity

D1/r-g

CAPM equation

E(Ra-Rf) \= a + BE(Rm-Rf)

Pay off for Long put when exercised

K-P-x

Pay off for Long put when not exercised

-x

Pay off for short put if exercised

P+x-k

Pay off for short put when not exercised

X

Pay off for Long call when exercised

P-K-x

Pay off for Long call when not exercised

-x

Pay off for short call when exercised

K+x-P

Pay off for short call when not exercised

X