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CFA Program Level I — Quick Drills: Formulas flashcards

10 of 80 cards free to study here · 15 topics · the whole deck is built into Willys

Eighty one-line formula drills: time value of money, returns, statistics, ratios and DuPont, NPV and IRR, WACC, leverage, margin, equity multiples, bond pricing, duration and convexity, forwards, put–call parity, CAPM and performance measures. Seven drills are marked as background.

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Drills deck · part of CFA Program Level I · written against: CFA Program Level I curriculum topics; Standards of Practice Handbook, 12th edition (2024), including Standard I(E) Competence. Updated 2026-10-10.

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  1. Holding-period return?
    HPR=P1−P0+D1P0HPR = \frac{P_1 - P_0 + D_1}{P_0} — price change plus income over start price.
    Returns
  2. Sample variance?
    s2=∑i=1n(Xi−Xˉ)2n−1s^2 = \frac{\sum_{i=1}^{n}(X_i - \bar{X})^2}{n - 1} — divide by n − 1 degrees of freedom.
    Statistics
  3. ROE by three-step DuPont?
    ROE=NISales×SalesAssets×AssetsEquityROE = \frac{NI}{Sales} \times \frac{Sales}{Assets} \times \frac{Assets}{Equity} — margin × turnover × leverage.
    Ratio Analysis
  4. Net present value of a project?
    NPV=∑t=0NCFt(1+r)tNPV = \sum_{t=0}^{N} \frac{CF_t}{(1 + r)^t} — CF0CF_0 is the negative outlay; accept if positive.
    Capital Budgeting
  5. Degree of operating leverage?
    DOL=Q(P−V)Q(P−V)−FDOL = \frac{Q(P - V)}{Q(P - V) - F} — contribution margin over operating income.

    Not in the 2026 Level I curriculum; background only.
    Working Capital and Leverage
  6. Margin call price for a long margin purchase?
    P=P01−m01−mmP = P_0 \frac{1 - m_0}{1 - m_m} — initial and maintenance margin fractions.
    Market Organization
  7. Price of an option-free bond from its yield to maturity?
    P=∑t=1NPMT(1+r)t+FV(1+r)NP = \sum_{t=1}^{N} \frac{PMT}{(1 + r)^t} + \frac{FV}{(1 + r)^N} — every flow at the periodic YTM.
    Bond Pricing
  8. Modified duration from Macaulay duration?
    ModDur=MacDur1+rModDur = \frac{MacDur}{1 + r} — r is the periodic yield.
    Duration and Convexity
  9. Put–call parity for European options?
    S0+p0=c0+X(1+r)TS_0 + p_0 = c_0 + \frac{X}{(1 + r)^T} — protective put equals fiduciary call.
    Derivatives
  10. CAPM required return?
    E(Ri)=Rf+βi[E(Rm)−Rf]E(R_i) = R_f + \beta_i [E(R_m) - R_f] — beta times the market risk premium.
    CAPM and Performance

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About these cards

Review status: Second-reader reviewed, with corrections applied.

Checked against:

  • Checked against standard texts: Bodie, Kane & Marcus, Investments; Fabozzi, Bond Markets, Analysis, and Strategies; Hull, Options, Futures, and Other Derivatives; and Brealey, Myers & Allen, Principles of Corporate Finance (reference only; no text copied). Formulas agree with this exam's other CFA Program Level I decks as reviewed on 2026-10-09.

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