Option-adjusted spread (oas) - total return, Financial Management

Assignment Help:

The horizon price can be determined by incorporating Option-Adjusted Spread (OAS) into a total return analysis. But this requires a valuation model. How the OAS is expected to change has to be specified at the end of investment horizon. The expectations of the portfolio manager are reflected through the assumptions made about the OAS value at the investment horizon. Usually OAS value assumed at the time of purchase and OAS at the horizon date will be the same. Total return determined using this assumption is referred to as constant-OAS total return.


Related Discussions:- Option-adjusted spread (oas) - total return

Concept of yield measures, A fixed income security investor can expect to r...

A fixed income security investor can expect to receive a rupee returns from the following sources: (a) Interest payment, (b) Capital gain or loss at maturity or when so

How does it help financial managers make business decisions, What is the in...

What is the investment opportunity schedule (IOS)?  How does it help financial managers make business decisions? The investment opportunity schedule illustrates graphically pro

Unity of command, Unity of Command Unity of command is the principle in...

Unity of Command Unity of command is the principle in which each subordinate should be responsible to only one manager.

Calculate the wacc and irr, The capital structure of Wild West Inc. is as f...

The capital structure of Wild West Inc. is as follows: Debts: $5,000,000 (face value) bonds with coupon rate at 8.00% and current price at par Preferred shares: $2,000,000

Explain process of financial control, Financial Control: - The establishmen...

Financial Control: - The establishment as well as use of financial control devices is an important function of financial management. These devices comprise: Budgetary Contro

What is deposit method, Q. What is Deposit Method? Deposit Method - Rel...

Q. What is Deposit Method? Deposit Method - Related to sales of real estate, under this method seller doesn't recognize any profits, doesn't record a note RECEIVABLE and contin

Foreign exchange - maximum loss, Q. Foreign exchange - Maximum loss? Fr...

Q. Foreign exchange - Maximum loss? From Marton's point of view an adverse outcome is depreciation of the dollar against sterling as this lowers its income when converted into

Determine the factors of financial risk by giving example, Determine the fa...

Determine the factors of financial risk by giving example W. T. L. Company's cost of long-term debt two years ago was 8 percent.  This 8 percent was found to represent a 4- per

Define the primary reasons that companies hold cash, What are the primary r...

What are the primary reasons that companies hold cash? Companies hold cash to make essential payments, to take benefit of opportunities as they arise, and to cover unforeseen eme

13 basic ratios, What its the net income? Total current assets, plant and e...

What its the net income? Total current assets, plant and equipment, net plant and equipment, our net account receivable?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd