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Structured convertibles
Structured convertibles

... Sunshine Mines issued a convertible bond with a 15-year maturity and an 8.5 percent coupon, convertible into silver at $20 an ounce.  The issuer is willing to share the potential price appreciation of the underlying commodity in exchange for a lower coupon rate and better terms in bond indentures. ...
Asset Classes and Financial Instruments
Asset Classes and Financial Instruments

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BRIEFING PAPER FOR THE MONETARY DIALOGUE FIRST
BRIEFING PAPER FOR THE MONETARY DIALOGUE FIRST

... The second question is: can the classic interest rate channel (IRC) alone, without financial frictions or credit constraints, explain these facts? They find that the IRC is a very prominent channel in the transmission but not dominant. In a group of member countries accounting for about 15% of the E ...
Month Sales Purchases April $72,000 $42,000 May 66,000 48,000
Month Sales Purchases April $72,000 $42,000 May 66,000 48,000

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... must pursue an investment strategy that includes both the production of income and the safety of capital considering the current and future needs of the City. The investment officers are required to develop an overall investment strategy, which incorporates both risk and return. This standard relate ...
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The EGP Exchange Rate Questions

... • Accumulating more foreign assets would be reflected in a domestic money supply increase, which in the absence of a sterilization intervention would initiate further inflationary pressures. Raising the nominal interest rates in that case would attract further foreign inflows, leading to a self-fulf ...
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54 Determinants of exchange rate of Indian rupee against us dollar

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The Use of Derivative Financial Instruments to

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Yet more on methods

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The Equity Premium: Consistent with GDP Growth and

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Module 3 : Recording Financial Transactions Lecture 2 : System of

< 1 ... 76 77 78 79 80 81 82 83 84 ... 178 >

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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