TAILIEUCHUNG - Ebook Quantitative investment analysis workbook (2nd edition): Part 2

(BQ) Part 2 book "Quantitative investment analysis workbook" has contents: The time value of money, discounted cash flow applications, statistical concepts and market returns, probability concepts, portfolio concepts, time series analysis,.and other contents. | PART SOLUTIONS II CHAPTER 1 THE TIME VALUE OF MONEY SOLUTIONS 1. A. Investment 2 is identical to Investment 1 except that Investment 2 has low liquidity. The difference between the interest rate on Investment 2 and Investment 1 is percentage point. This amount represents the liquidity premium, which represents compensation for the risk of loss relative to an investment’s fair value if the investment needs to be converted to cash quickly. B. To estimate the default risk premium, find the two investments that have the same maturity but different levels of default risk. Both Investments 4 and 5 have a maturity of eight years. Investment 5, however, has low liquidity and thus bears a liquidity premium. The difference between the interest rates of Investments 5 and 4 is percentage points. The liquidity premium is percentage point (from Part A). This leaves − = percentage points that must represent a default risk premium reflecting Investment 5’s high default risk. C. Investment 3 has liquidity risk and default risk comparable to Investment 2, but with its longer time to maturity, Investment 3 should have a higher maturity premium. The interest rate on Investment 3, r3 , should thus be above percent (the interest rate on Investment 2). If the liquidity of Investment 3 were high, Investment 3 would match Investment 4 except for Investment 3’s shorter maturity. We would then conclude that Investment 3’s interest rate should be less than the interest rate on Investment 4, which is 4 percent. In contrast to Investment 4, however, Investment 3 has low liquidity. It is possible that the interest rate on Investment 3 exceeds that of Investment 4 despite 3’s shorter maturity, depending on the relative size of the liquidity and maturity premiums. However, we expect r3 to be less than percent, the expected interest rate on Investment 4 if it had low liquidity. Thus percent < r3 < percent. 2. i. Draw a time line. ii. Identify the .

• Tài chính doanh nghiệp
• The time value of money
• Discounted cash flow applications
• Statistical concepts
• Quantitative investment analysis workbook
• Market returns
• Probability concepts
• Portfolio concepts
• Time Value of Money
• Future value of Money
• Present value of Money
• Rates of return amortization
• Time lines show timing of cash flows
• Time line for an ordinary annuity
• Time and Money
• Financial Calculator
• Present Value
• Future Value
• Interest rate
• Inventory model
• Crashable lead time
• Management of the current assets
• Solution algorithm
• Managerial Accounting
• Lecture Managerial Accounting
• Kế toán quản trị
• Managerial finance
• Lecture Managerial finance
• Rates of return
• Intermediate accounting
• Lecture Intermediate accounting
• Single sum problems
• Present value measurement
• Compound interest
• Finance management
• Fundamentals of finance management
• Time lines
• The power of compound interest
• Savings problem
• The balloon payment
• Stocking and price reduction decisions
• Non instantaneous deteriorating items
• Complex and time consuming
• Decision making processes
• Lecture Money and Banking
• Bài giảng Tiền tệ và Ngân hàng
• Money and Banking
• Future value concepts
• Financial environment
• Financial Accounting
• Financial management
• Fundamentals of financial management
• Financial statement
• Quản lý tài chính
• Personal financial planning
• Personal financial
• Lecture Personal financial planning
• Financial planning
• Engineering economics
• Lecture Engineering economics
• Time value
• Money application
• Determining operating costs
• Calculating annual costs
• Lecture Financial accounting
• Future amounts
• Present values
• Financial instruments
• Business decision
• Kế toán tài chính
• Business finance
• Business organisation
• Fundamentals of finance
• Lecture Business finance
• Capital market
• Equity securities
• Issues in financial accounting
• Financial statements
• Future values
• Lecture Engineering economy
• Engineering economy
• Bài giảng Kinh tế kỹ thuật
• Computation of simple interest
• Accumulated interest
• Financial transactions