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Regular Council Meeting 12-16-14
Regular Council Meeting 12-16-14

Financial Instruments
Financial Instruments

CHAPTER 3 THE LOANABLE FUNDS MODEL
CHAPTER 3 THE LOANABLE FUNDS MODEL

... might be very sensitive to increases in mortgage rates. An increase in the payment of a 30-year fixed rate $150,000 home mortgage that rises from 7% to 9% equals slightly less that $200 per month. One would expect the demand for home loans to fall in an environment of rising interest rates. If priva ...
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... stock outstanding, 1 million shares of 6 percent preferred outstanding, and 100,000 $1,000 par, 9 percent semiannual coupon bonds outstanding. The common stock sells for $35 per share and has a beta of 1.0, the preferred stock sells for $60 per share, and the bonds have 15 years to maturity and sell ...
On the Construction of an Early-Warning System for Systematic Risk
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NBER WORKING PAPER SERIES

... real in drop a prices, stock in fall a to lead would sector corporate the in growth productivity lower and risk increased both that likely is it wealth, total of quarter a than more been rarely has capital corporate that fact the of account takes which model, two—real--asset richer a In growth. prod ...
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... communication initiatives by providing forward guidance about future policy. In August 2011, it started to explicitly lay out its expectations for the future path of the federal funds rate. The Fed’s unconventional balance sheet policies began in 2009 with a program of large-scale asset purchases (L ...
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... E. Distinguishing Among Money, Income, and Wealth Money, like other assets, is a component of wealth, which is the sum of the value of a person’s assets minus the value of the person’s liabilities. A person’s income is equal to his or her earnings over a period of time. F. What Can Serve as Money? A ...
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... 10. The Capital Structure of ABC Ltd consists of Ordinary Share Capital of Rs. 5 lacs (@ Rs. 100 per Share) & 10% debentures of Rs. 100 each – Rs. 5 lacs. Sales increased from 50,000 to 60,000 units, the Selling Price being Rs. 12 p.u, VC amounting to Rs. 8 p.u & Fixed Expenses amounting to Rs. 1 la ...
міністерство освіти і науки україни державний економіко
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... other favorite food. That is there are any numbers of foods that will satisfy the basic need for food. The point is that the range of things represented by the term «want» is much broader than those represented by the term «need». Sometimes the difference between a want and a need is clear, at other ...
Market Value of the Firm, Market Value of Equity
Market Value of the Firm, Market Value of Equity

... The objective of this paper is to answer these questions by a mathematic model based on optimal control theory and derived from comparison study about maximization. I am going to accomplish four arguments. (1) We measure the performance of the firm by return rate on capital (i.e., maximum return rat ...
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Present value

In economics, present value, also known as present discounted value, is the value of an expected income stream determined as of the date of valuation. The present value is always less than or equal to the future value because money has interest-earning potential, a characteristic referred to as the time value of money, except during times of negative interest rates, when the present value will be greater than the future value. Time value can be described with the simplified phrase, “A dollar today is worth more than a dollar tomorrow”. Here, 'worth more' means that its value is greater. A dollar today is worth more than a dollar tomorrow because the dollar can be invested and earn a day's worth of interest, making the total accumulate to a value more than a dollar by tomorrow. Interest can be compared to rent. Just as rent is paid to a landlord by a tenant, without the ownership of the asset being transferred, interest is paid to a lender by a borrower who gains access to the money for a time before paying it back. By letting the borrower have access to the money, the lender has sacrificed the exchange value of this money, and is compensated for it in the form of interest. The initial amount of the borrowed funds (the present value) is less than the total amount of money paid to the lender.Present value calculations, and similarly future value calculations, are used to value loans, mortgages, annuities, sinking funds, perpetuities, bonds, and more. These calculations are used to make comparisons between cash flows that don’t occur at simultaneous times. The idea is much like algebra, where variable units must be consistent in order to compare or carry out addition and subtraction; time dates must be consistent in order to make comparisons between values or carry out simple calculations. When deciding between projects in which to invest, the choice can be made by comparing respective present values of such projects by means of discounting the expected income streams at the corresponding project interest rate, or rate of return. The project with the highest present value, i.e. that is most valuable today, should be chosen.
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