Investment w/o Risk:
Inflowoutflow-1>r
R=Δpp0+cfp0
PV:V0=Vt1+kt=Vt*PVIF(k;t)
FV: Vt=V0*1+kt=V0*FVIF(k;t)
keffective=kstatedm, k stated over year:APR
Gross Interest Rate: 1+k
Going from one EAR to other: 1+kx month eff.yx-1=[1+ky month eff.] Compounded to EAR … use this… also, less than a year to annual (special case): EAR=1+kstatedmm-1 EPR=1+APRmmt
Continuous Compounding: Vt=etkc--- if the $ is received in one year then the formula is: V0=e-tkc, t-years and not periods and kc-discount Rate Relation between EAR and kC:kEAR=ekC-1 , kC=ln(1+kEAR)

Present/future Value Additives: Cash flows at a particular time. Invest:NPV>0 Present Value of Annuities: V0=CF1- 11+knk=CF[PVIFAk;n] =
Present Value of Perpetuities:V0=CFk
1k=PVIFAk,n≡Annuity, n→∞
Future Values of Annuities:Vn=V0*FVIFk,n=CF*PVIFAk;n*FVIFk;n=CF*FVIFA(k;n) FVIFAk;n=1+kn-1k
Annuities Due: PVIFAduek;n=1-11+knk(1+k), FVIFAduek;n=1+kn-1k(1+k) Growing Annuity:V0=CF1*1-1+gn1+knk-g≡Annuity at g=0, CF2=CF1(1+g) Growing Perpetuity:V0=CF1k-g≡Prep at g=0
Amortized Loans: V0=CF*PVIFA(k;n)
Loan=Payment*PVIFA(k;n)
Canadian Mortgage: k1 Month eff.Rate=1+k216
Sample Mean: x=i=1nxin n
Risk or variability(s-variance):s2=i=1n((xi-x))^2 (n-1)
S=s2
EX=i=1mprobi*xi
Legend: R-Return, cf=Capital Gain, k=interest rate/year PVIFA: present value interest factor of annuity, m-Com. freq:#times/yr-given by question, k(EAR)-Affected due to compounding of interest rate, t-# of years, n-period, s2:Sample Variance, s:Standard deviation, m:number of different possible rationalization

...
Advance Finance
Insert Name
Insert Institution
Advance Finance
Question 1: Periodic Interest Rates
Calculating Periodic Rate and Effective Annual Interest Rate
Applied Formula by Fouque and Papanicolaou (2011):
Effective interest rate per period, (i) = ( 1 + ( r / m ) )m – 1
Effective interest rate for t periods, it = ( 1 + i )t - 1
or a single equation it = ( 1 + ( r / m ) )mt - 1.
The rate per compounding period...

...-------------------------------------------------
00 Unit 3 Assignment
-------------------------------------------------
Supporting Children
E1 - Identify FIVE (5) pieces of current legislation (5) Jenny, Maureen and Sam
List five different pieces of legislation that are relevant to influencing the way we work with children in a childcare setting – you must give the full title and date for each one.
E2 – Describe how each piece of legislation will influence working practices in the...

...from the business, and that loans have a finite term. Investors will provide her with equity, meaning that they will essentially buy into her business and own a ‘slice’ of the company for the future. Investors who see potential in her company will finance her project in the form of cash or securities and she will offer a contractual right in owning part of her business. This means that investors will share in the potential future profits of the company through dividends, and the...

...its intrinsic value is smaller than its market value.
* The income statement shows us the firm’s financial situation over a period of time.
* Last year, Blanda Brothers had positive cash flow from operation; however, cash on its balance sheet decreased.which explain this? Answ:The company purchased a lot of new fixed assets.
* Company A and Company B have the same total assets, Return on Assets (ROA), and profit margin. However, Company A has higher debt ratio...

...differential between interest rates in the advanced economies and emerging economies.
First, the central bank’s balance sheet may experience significant volatility from foreign exchange translation gains or losses due to the mismatch between its foreign currency assets and its local currency liabilities. A strengthening local currency may lead to negative capital on the balance sheet as foreign currency-denominated assets are revalued downwards due to currency...

...FORMULA SHEET – for student reference only
Perpetuity:
The value of a perpetuity of $RM1 per year is:
Equivalent Annual Cost:
If an asset has a life of ‘t’ years, the equivalent annual cost is:
Annuity:
The value of an annuity of $RM1 per period for t years (t-year annuity factor) is:
Measures of Risk:
Variance of returns = σ2
= expected value of
Standard deviation of returns, σ =
Covariance...

...
Introduction - Types Of Financial Institutions And Their Roles
A financial institution is an establishment that conducts financial transactions such as investments, loans and deposits. Almost everyone deals with financial institutions on a regular basis. Everything from depositing money to taking out loans and exchanging currencies must be done through financial institutions. Here is an overview of some of the major categories of financial institutions and their roles in the financial...

...rectangles, and relationships are shown by lines between the rectangles. Attributes are generally listed within the rectangle. The many side of many relationships is represented by a crows footentity-relationship (E-R) modelA set of constructs and conventions used to create data models. The things in the users world are represented by entities, and the associations among those things are represented by relationships. The results are usually documented in an entity-relationship (E-R)...