Partitioning the present value

Assignment Help Financial Management

Reference no: EM13946981

Partitioning the present value: a. is an application of the certainty equivalent technique. b. avoids the need to apply sensitivity analysis. c. eliminates the need to discount the anticipated cash flows. d. none of the above is true.

Reference no: EM13946981

Questions Cloud

Issued bonds-what is the yield to maturity : PBJ Corporation issued bonds on January 1, 2006. The bonds had a coupon rate of 5.5% with interest paid semi annually. The face value of the bonds is 1,000$ and the bonds mature on January 1, 2021. What is the yield to maturity for an PBJ Corporation..

Futures contract is on the same underlying security : Compute the price of an American put option with strike K=110 and maturity T=.25 years. Compute the fair value of an American call option with strike K=110 and maturity n=10 periods where the option is written on a futures contract that expires after..

What single payment could be made at beginning of first year : You need $25,356 at the end of 9 years, and your only investment outlet is an 9 percent long-term certificate of deposit (compounded annually). With the certificate of deposit, you make an initial investment at the beginning of the first year. What s..

Risk premium employed in the risk-adjusted discount rate : The risk premium employed in the risk-adjusted discount rate: a. is divided by the risk-free rate to determine the risk-adjusted rate. b. is usually the rate of return available on short term treasury bills. c. will be the same for most investors, bu..

Partitioning the present value : Partitioning the present value: a. is an application of the certainty equivalent technique. b. avoids the need to apply sensitivity analysis. c. eliminates the need to discount the anticipated cash flows. d. none of the above is true.

About the sensitivity analysis : Sensitivity analysis: a. is a logical extension of partitioning to determine what portions of the forecast merit further refinement. b. is similar in form to payback analysis, except that it is done on a present value basis. c. is a substitute for th..

Bond is likely to be called if its coupon rate : A bond is likely to be called if its coupon rate is below its YTM. A bond is likely to be called if its market price is below its par value. A bond is likely to be called if its market price is equal to its par value. A bond is likely to be called if..

The expected return on the market and risk-free rate : The expected return on the market is 12%. 8% coupon bonds with face value of $1000 that mature in 10 years. These bonds have a yield to maturity of 6%. There are 250,000 of these bonds. Zero-coupon bonds with face value of $1000 that mature in 3 year..

Which the two systems will break even : A certain area can be irrigated by piping water from a nearby river. Two competing installations are being considered, for which the following engineering and cost data apply : On the basis of a 10-year life with an interest rate of 12%, determine th..

User Account

All Pages