Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
We can discount cash flows either by using spot rates or forward rates, because a spot rate is simply a package of short-term forward rates. Assume that the cash flow of period T is $1; then, the present value of the cash flow using the spot rate for period T will be as follows:
PV of $1 in M periods =
We know that,
yT = [(1 + y1) (1 + 1f1) (1 + 1f2) (1 + 1f3) ..... (1 + 1fT-1)]1/ T - 1
Adding 1 on both sides of the equations,
(1 + yT) = [(1 + y1) (1 + 1f1) (1 + 1f2) (1 + 1f3) ..... (1 + 1fT - 1)]1/ T
Raising both sides of the equations to the T-th power, we get:
(1 + yT)T = [(1 + y1) (1 + 1f1) (1 + 1f2) (1 + 1f3) ..... (1 + 1fT - 1)]
The present value of X1 in M periods can be determined by substituting the value calculated in the above step into the present value formula.
PV of X1 M periods =
The present value of Rs.1 in T period is called the forward discount factor for period T.
Explain the major types of audit plans Three major types of audit plans Strategic -this the long term forward looking audit, it continually gets updated and identifies are
The Role of Merchant Banker The issuer appoints the Merchant Banker (or Investment Banker) to undertake the issue activity. A Merchant Banker performs multiple functions during
Q. What is ABC Analysis? ABC Analysis: - ABC Analysis is a method of controlling different items of inventory. Generally a firm has to maintain several different items as inven
Which is lower for a given company: the cost of debt or the cost of equity? Explain. Ignore taxes in your answer. The cost of debt is all the time less than the cost of equi
Q. Location of lifting anchors in precast concrete units? It is desirable that position of anchors be located symmetrical to the centre of gravity of precast concrete units. Or
Rate of return of a Bond In case of bonds, rather than dividends, investor is entitled to payments of interest yearly or semi-annually. Investor also benefits if there is an ap
Assume we are in the midst of the financial crisis in October 2008. Your firm is considering the purchase of a 10 year put option on the S&P 500 Index. You are analyzing the pricin
Explain the terms- Stock and Share Stock Ownership of a company represented by shares that are a claim on the company's earnings and assets. Share Unit of equity
Determine the Management buy-outs Management buy-outs (MBOs) The management of company buy out the shareholders. Management will usually require financial backers (ventu
In 1952, to provide equilibrium between assets and liabilities of insurance companies, Frank Redington, an English actuary, proposed interest rate immunization te
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!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd