Nominal risk free - Study guides, Class notes & Summaries

Test Bank for Engineering Economics Financial Decision Making for Engineers Canadian 6th edition TEST Bank Engineering Economics 6 th Edition Niall M. Fraser Elizabeth M. Jewkes Mehrdad Pirnia Engineering Economics, 6e (Fraser/Pirnia) Chapter 1 Engineering Decision Making 1.1 Multiple Choice Questions 1) Evaluation of an engineering project involves the following constraints A) financial, environmental, social and political constraints. B) technical and financial constraints. C...

INV2601 INTRODUCTION TO INVESTMENT NOTES. 1 THE INVESTMENT BACKGROUND STUDY UNIT 01: THE INVESTMENT SETTING - The goal of investment management is to achieve the investor’s required return - Required return is the return that compensates the investor for the time during which funds are committed - It should exceed the opportunity costs and the expected rate of inflation - Investing in investments that satisfy the required return helps the investor to create wealth *Assets – Liabili...

CFA SALT TEST SOLUTIONS (100% Accurate) CFA SALT TEST SOLUTIONS (100% Accurate) A company is able to borrow over 5 years at a 5.7% interest rate. If the nominal risk-free rate is 4% and lenders require premiums of 1% for inflation, 0.8% for liquidity, and 0.4% for maturity, the compensation for the possibility that the company does not repay the loan is closest to: - ANSWER - Remember r = rf + I + D + L + M Nominal risk free rate = rf + I = 4%. I = 1% L = 0.8% M= 0.4% So 5.7 = 4 + D...

CFA Level 1 Formulas question and answers rated A+ 2024Price change based on convexity - correct answer -duration(change in yield)+1/2(convexity)(change in yield)^2 Effective Duration - correct answer Required if a bond has embedded options: [(v-)-(v+)]/[2V0(change in curve)] Modified Duration - correct answer [(v-)-(v+)]/[2V0(change in yield)] Future Value - correct answer PV(1+(I/Y)^N) PV - correct answer FV/(1+r)^n PV of perpetuity - correct answer PMT / discount rate Approx...

Profit maximization as a goal of the firm: a. is an economic principle and not an accounting one b. is superior to other goals that could be pursued c. maximizes the wealth of the owners d. does not consider cash flow or risk - correct answer d. does not consider cash flow or risk Wealth maximization as a goal of the firm: a. is usually discounted by bondholders b. takes a long-run perspective and focuses on the owners of the firm c. is a long-run p...

FNCE 401 Final Exam All Possible Questions and Answers 2024/2025 Fully Solved 100%;Athabasca University FNCE 401 Final Exam All Possible Questions and Answers 2024/2025 Fully Solved 100% Part I – Multiple Choice Questions: (25 × 2 = 50 marks) 1. Corporate shareholders are best protected from incompetent management decisions by a. the ability to engage in proxy fights. b. management's control of pecuniary rewards. c. the ability to call shareholder meetings. d. the threat...

VSB 2009 Exam 2 Questions & Answers 2024/2025 Production opportunities - ANSWERSThe investment opportunities in productive (cash generating) assets Time Preferences for Consumption - ANSWERSThe preferences of consumers for current consumption as opposed to saving for future consumption Risk - ANSWERSIn a financial market context, the chance that an investment will provide a low or negative return Inflation - ANSWERSThe amount by which prices increase over time Real risk-free int...

VSB 2009 Test 2 Questions & Answers 2024/2025 Taussig Corp.'s bonds currently sell for $920. They have a 6.35% annual coupon rate and a 20-year maturity, but they can be called in 5 years at $1,067.50. Assume that no costs other than the call premium would be incurred to call and refund the bonds, and also assume that the rates are expected to remain at current levels on into the future. Under these conditions, what rate of return should an investor expect to earn if he or she purchases th...

Price change based on convexity correct answer - -duration(change in yield)+1/2(convexity)(change in yield)^2 Effective Duration correct answer - Required if a bond has embedded options: [(v-)-(v+)]/[2V0(change in curve)] Modified Duration correct answer - [(v-)-(v+)]/[2V0(change in yield)] Future Value correct answer - PV(1+(I/Y)^N) PV correct answer - FV/(1+r)^n PV of perpetuity correct answer - PMT / discount rate Approximate percentage price change of a bond correct answer ...