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The development and determinants of euro currency
The development and determinants of euro currency

What Else Can Central Banks Do? - Economics
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... The researcher worked on stock return upon whole capital market, industry and particular listed firm’s return and sometime comparison between these certain return of two firms and/or industry with assistance of common independent variables exist in any economy. Emin et al. examined the market based ...
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... the financing of some projects. Anticipating such hold-up, the debtor might not invest in search to find the profitable opportunity. Another solution to the overhang problem would have C2 refinance the debt to C1 as well as fund the new project. However, this raises the cost of C2’s financing and in ...
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... 40. A bank charges a commercial borrower an 11% interest rate on a one year loan. The bank also charges a 0.5% origination fee and requires compensating balances of 8% in the form of demand deposits. What is the promised gross rate of return on the loan? A) 11.45% B) 12.39% C) 12.10% D) 11.67% E) 11 ...
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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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