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...  Return: $ an investor receives above and beyond the sun of money initially invested  Bonds: Sold by govt and corporations to fund projects, sold for certain term (period of time) ...
The Decision-Making Process
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... more of your resources (time, money, and effort). personal opportunity costs may involve time, health, or energy. For example, time spent on studying usually means lost time for leisure or working. However, this trade-off may be appropriate since your learning and grades will likely improve. financi ...
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Financial Maths Questions File

... The table below shows the deposits, in Australian dollars (AUD), made by Vicki in an investment account on the first day of each month for the first four months in 1999. The interest rate is 0.75% per month compounded monthly. The interest is added to the account at the end of each month. ...
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Exam2 Programming Review questions

... (15%) An input data file named Temperature.dat, contains a positive, integer value on the first line that indicates how many temperature values are in the file (each line after that contains a temperature value which is a real number). The temperatures, in degrees Fahrenheit, are average daily tempe ...
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download soal

... 5. Return investasi bisa berbentuk dua hal yaitu 6. Calculate the expected returns for the stock. Its current price is $ 125. Its next expected dividend is $ 21. And you expect to sell it for $ 137 in one year. 7. An analyst projects that a stock will pay a $ 2 dividend next year and that it will se ...
Chapter 8 Money, Banking, Saving and Investing
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1. A buyer of a newly-issued bond A) is a borrower of funds. C) is

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... increases the demand for reserves. Draw a graph of the interbank market when a central bank increases the reserve ratio while maintaining a fixed money level of reserves. If there is a given level of reserves and the reserve to deposit ratio rises, what effect will this have on the money supply. Dra ...
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... amount that the company must contribute to the plan while the employees are working • Defined-benefit plan - specifies the amount that the company must pay to its employees during retirement ...
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Macroeconomic Analysis ECON 6022A Fall 2011 Problem Set 4

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Present value

In economics, present value, also known as present discounted value, is the value of an expected income stream determined as of the date of valuation. The present value is always less than or equal to the future value because money has interest-earning potential, a characteristic referred to as the time value of money, except during times of negative interest rates, when the present value will be greater than the future value. Time value can be described with the simplified phrase, “A dollar today is worth more than a dollar tomorrow”. Here, 'worth more' means that its value is greater. A dollar today is worth more than a dollar tomorrow because the dollar can be invested and earn a day's worth of interest, making the total accumulate to a value more than a dollar by tomorrow. Interest can be compared to rent. Just as rent is paid to a landlord by a tenant, without the ownership of the asset being transferred, interest is paid to a lender by a borrower who gains access to the money for a time before paying it back. By letting the borrower have access to the money, the lender has sacrificed the exchange value of this money, and is compensated for it in the form of interest. The initial amount of the borrowed funds (the present value) is less than the total amount of money paid to the lender.Present value calculations, and similarly future value calculations, are used to value loans, mortgages, annuities, sinking funds, perpetuities, bonds, and more. These calculations are used to make comparisons between cash flows that don’t occur at simultaneous times. The idea is much like algebra, where variable units must be consistent in order to compare or carry out addition and subtraction; time dates must be consistent in order to make comparisons between values or carry out simple calculations. When deciding between projects in which to invest, the choice can be made by comparing respective present values of such projects by means of discounting the expected income streams at the corresponding project interest rate, or rate of return. The project with the highest present value, i.e. that is most valuable today, should be chosen.
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