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Quantitative Techniques and Financial Mathematics
Quantitative Techniques and Financial Mathematics

Select the Right Card
Select the Right Card

general investment information
general investment information

... ISSUER AGREES TO REPAY THE BONDHOLDER AT THE MATURITY DATE. (face value) THE COUPON RATE IS THE RATE OF INTEREST THAT THE ISSUER AGREES TO PAY EACH YEAR. (Example : a bond with an 8% coupon and a principal of $1000 will pay annual interest of $ 80 ) WHAT ARE ZERO-COUPON BONDS ? ...
ECON 4110
ECON 4110

Presentation
Presentation

MODEL ANSWERS TO FINANCIAL ECONOMICS (IOBM
MODEL ANSWERS TO FINANCIAL ECONOMICS (IOBM

... Examples include regular deposits to a savings account (standing order), monthly rentals, pension income, mortgage payments etc (v) Amortization Is the process of decreasing or accounting for an amount over a period of time. It is the distribution of a single lump sum cash flow into many smaller cas ...
CHAPTER5HOMEWORKWITHANSWERS
CHAPTER5HOMEWORKWITHANSWERS

... A quick source of cash is to liquidate savings. ...
Math 11e
Math 11e

... nearest “hundredth” to create the number 3.14. Rounding is simply picking a place value you wish to round to, identifying that number, looking to the number to the right of that number and if that number is 4 or less, your place value number stays the same. ...
open market operations
open market operations

... When banks need to borrow reserves from other banks they go to the Fed Funds Market. Banks offer their excess funds to other banks for overnight lending to meet their reserve requirements. The Federal Reserve does not decree this interest rate, but they use bonds to add or take from this pool of mon ...
Chapter 9 - McGraw Hill Higher Education
Chapter 9 - McGraw Hill Higher Education

... 6. Show how a line of credit affects financial statements. 7. Explain how to account for bonds issued at face value and their related interest costs. 8. Use the straight-line method to amortize bond discounts and premiums. 9. Distinguish between current and noncurrent assets and liabilities. ...
Slides
Slides

Exponential and Logarithmic Functions
Exponential and Logarithmic Functions

... Back to Compound Interest Let’s return to the concept of compound interest. If the number of compounding periods in a year is increased indefinitely, we arrive at the concept of compounding continuously. Mathematically, we can do this by applying the limit concept to the expression r ...
Year 9 Financial Management Revision Booklet Name: Date: Topics
Year 9 Financial Management Revision Booklet Name: Date: Topics

... b) James later sold the shares when they reached a price of $27.16. Calculate the total amount James received and his total profit. 2000 x $27.16 = $54,320 Profit = $54,320 - $51,560 22. Define the term credit. Credit is an agreement in which you receive goods and services now and pay for it later g ...
Downlaod File - Prince Mohammad Bin Fahd University
Downlaod File - Prince Mohammad Bin Fahd University

... 8. To pay for college, you have just taken out a $1,000 government loan that makes you pay $126 per year for 25 years. However, you don’t have to start making these payments until you graduate from college two years from now. Why is the yield to maturity necessarily less than 12%, the yield to matu ...
Interest Rate Swaps
Interest Rate Swaps

... bank with a capital and reserves position greater than $1 billion. For all other defined financial institutions, the margin requirement shall be the market deficiency calculated in respect of the transaction on an item by item basis. For example, margin equal to the difference in market value betwee ...
Final February 9, 2002
Final February 9, 2002

Notes
Notes

Answers to Midterm 3040A
Answers to Midterm 3040A

... her account reaches $10,000. A decrease in the rate of return she earns will: A) Increase the value of her account faster. B) Cause her to wait longer before withdrawing her money. C) Cause the present value of her account to decrease. D) Allow her to withdraw more money sooner. E) Cause the compoun ...
Document
Document

Questions
Questions

... which makes them difficult to sell. There are readily available second-hand markets for cars and houses with plenty of buyers which make them easy to sell. There are likely to be few number plate buyers available at any time – the market is ‘thin’. This implies either taking some time to sell (e.g. ...
I = prt - SWMStbradford
I = prt - SWMStbradford

... Mrs. Smith invested $4000 in a bond with a yearly interest rate of 4%. Her total interest on the investment was $800. What was the length of the investment? ...
Lesson: "Applications: Growth and Decay"
Lesson: "Applications: Growth and Decay"

Chapter 3: The IS
Chapter 3: The IS

as PDF
as PDF

... Naturally, some areas and some years see the 6% appreciation rate go as high as 12%. A lot of investors (like myself) refinance after they have created an extra 20% equity (see year 5) and buy a new property with the money and start all over. If you held the property for 10 years, it would be worth ...
Additional Computer Exercise 3
Additional Computer Exercise 3

... Number of periods (nper) – the total number of payments or periods of an investment. (n) Payment (pmt) – the amount paid periodically to an investment or loan. (A) Present value (pv) – the value of an investment or loan at the beginning of the investment period. For example, the present value of a l ...
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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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