Perpetuity - Study guides, Class notes & Summaries

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

Adventis Financial Modeling Certification (FMC) Level 2 Exam (Latest 2023/ 2024 Update) Questions and Verified Answers| 100% Correct| Grade A Q: a security pays $100 in 3 years and you are required a minimum rate of return of 12% annually. What is the maximum amount you will purchase this security for today? Answer: $71.18 Q: You receive a loan for $1000. The loan accumulates interest at a rate of 6.5%. How much will interest will you owe in 4 years? Answer: $286.47 ...

C A construction estimate is used A. To judge tentatively or approximate value of the project B. To produce a statement of the approximate cost C. To decide an approximation of the value of the project and not the exact cost D. None of these C What is the term for an annuity with a fixed time span? A. Ordinary annuity B. Perpetuity C. Annuity certain D. Annuity due

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 (-)(modified...

Which of the following will increase the future value of a lump sum amount to be received in 15 years? a. A decrease in the present value b. Changing to simple interest from compound interest c. An increase in the interest rate d. A decrease in the future value e. A decrease in the interest rate correct answers C The present value of a lump sum future amount: a. Is directly related to the interest rate b. Decreases as the time period increases c. Is inversely related t...

The present value of future cash flows are computed by multiplying future value with the: o :## discounting factor Which of the following is used as the denominator while calculating the present value for a growing perpetuity that begins next period (PVP)? o :## The difference between i (the discount or interest rate) and g (the constant rate of growth of the cash flow) William deposited $25,000 today that would earn an interest at the rate of 3% for a period of 2 years. The amount of ...

How do you find price per share? correct answers Div/(r-g) Where G= ROE*(1-Div/EPS) How do you find the value per share of a company that does not grow? correct answers EPS/(r-0) . It's EPS because if company is not reinvesting its EPS then it has to give them all out. What payout dividend policy maximizes the shareholders of a company? correct answers When the ROE>r the optimal strategy is 100% retention. This is because the company is outperforming and returning more money than it's...

Answers 100% Pass 1. What is the minimum balance of the real estate education, research, and recovery fund? A) $300,000. B) $100,000. C) $250,000. D) $500,000. a 2. How long after the signing of a contract for the purchase of a lot in NV or anywhere else may the purchaser cancel the transaction? A) 24 hours B) within five calendar days C) five business days D) or one week b 3. In NV, who is responsible prior to closing for calculating the pro-rations between the buyer and sell...

Who was tasked with acquiring land along the north shore of Lake Ontario and for the settlement of incoming Loyalists? A. Sir William Johnson B. Sir John Johnson C. Mississaugas of the Credit D. British settlers E. Indigenous affairs B Sir John Johnson was tasked with acquiring land along the north shore of Lake Ontario and for the settlement of incoming Loyalists, as mentioned in the provided content What role did Wampum diplomacy play in the negotiations with the Mississaugas of ...