Need an all-in-one list with the **Fixed-Income Investments** formulas included in the CFA Level 1 Exam? We have compiled them for you here. The relevant formulas have been organized and presented by chapter. In this section, we will cover the following topics —** Fixed-Income Securities and Fixed-Income Valuation**.

**1. Fixed-income Securities**

**Conversion ratio**

Conversion~ratio = \frac {Par~value}{Conversion~price}

**Conversion value**

Conversion~value = Share~price \times Conversion~ratio

**Conversion premium/discount**

Conversion ~premium/discount=Convertible~bond~price - Conversion~value

**2. Introduction to Fixed-income Valuation**

**Fixed-rate bonds**

PV = \frac {PMT}{(1 + r)^1} + \frac {PMT}{(1 + r)^2}+…+ \frac {PMT+FV}{(1 + r)^N}

PV = Present value (price)

PMT = Coupon payment amount per period

r = Discount rate

N = Number of periods to maturity

FV = Face value/par value/future value

PV = \frac {PMT}{(1 + Z_1)^1} + \frac {PMT}{(1 + Z_2)^2}+…+ \frac {PMT+FV}{(1 + Z_N)^N}

PV = Present value (price)

PMT = Coupon payment amount per period

Z_n = Spot rate per period

N = Number of periods to maturity

FV = Face value/par value/future value

PVFlat = PVFull - AI

PVFull = \Bigg [\frac {PMT}{(1 + r)^{1-\frac {t}{T}}} + \frac {PMT}{(1 + r)^{2-\frac {t}{T}}}+…+ \frac {PMT}{(1 + r)^{N-\frac {t}{T}}} \Bigg ]

PVFull = PV \times (1 + r)^{\frac {t}{T}}

AI = \frac {t}{T} \times PMT

PVFull = Full price of a bond

PVFlat = Flat price of a bond

AI = Accrued interest

PMT = Coupon payment amount per period

N = Number of periods to maturity

T = Number of days within a coupon payment period

t = Number of days from the last coupon payment to the settlement date

**Fixed-rate bonds**

\bigg( 1+\frac {APR_m}{m}\bigg)^m=\bigg( 1+\frac {APR_n}{n}\bigg)^n

APRm = Annual percentage rate for m

m = Periodicity that you are converting from

APRn = Annual percentage rate for n

n = Periodicity that you are converting to

**Current yield**

Current~yield = \frac {Total~PMT~in~a~year}{Flat~Price}

**Floating Rate Notes (FRNs)**

PV=\frac { \frac {(Index + QM) \times FV}{m} }{ \Big(1+\frac {Index + DM}{m} \Big)^1} + \frac { \frac {(Index + QM) \times FV}{m} }{ \Big(1+\frac {Index + DM}{m} \Big)^2}+…+ \frac { \frac {(Index + QM) \times FV}{m}+FV }{ \Big(1+\frac {Index + DM}{m} \Big)^N}

PV = Present value (price) of a floating-rate note

Index = Reference rate (stated as an annual percentage rate)

QM = Quoted margin (stated as an annual percentage rate)

FV = Future value paid at maturity (par value)

m = Periodicity of the floating- rate note, or the number of payment periods per year

DM = Discount/required margin (stated as an annual percentage rate)

N = Number of evenly spaced periods to maturity

*Money market instruments*

PV = FV \times \bigg ( 1-\frac {Days}{Year} \times DR \bigg )

FV = PV + \bigg ( PV \times \frac {180}{365} \times AOR \bigg )

PV = Present value (price) of the money market instrument

FV = Future value (face/par value) of the money market instrument

Days = Number of days between settlement and maturity

Year = Number of days in the year

DR = Discount rate (stated as an annual percentage rate)

AOR = Add-on rate (stated as an annual percentage rate)

*Forward rates*

(1 + Z_A)^A \times (1 + IFR_{A,B-A})^{B-A} = (1 + Z_B)^B

Z_n = Spot rate

IFR = Implied forward rate

**Follow the links to find more formulas on Quantitative Methods, Economics, Corporate Finance, Alternative Investments, Financial Reporting and Analysis, Portfolio Management, Equity Investments, and Derivatives, included in the CFA® Level 1 Exam.**