FIN 3715 Study Guide - Midterm Guide: Corporate Bond, Money Supply, Opportunity Cost
Document Summary
Economy mostly farms, self-sufficient or relied on exchanges not involving money. Steady westward flow of population into areas of agriculture and community opportunity. Rise in population, cultivated acreage, industry, and living conditions. After free banking and lot of instability and bank failures. Country banks made loans to farmers (on mortgage or personal security) New england credit to manufacturing (textiles, boots/shoes, & machinery) Railroads were the first big business in the us (post civil war) Frontiers more scientific and technical rather than geographic. Chpt 7 primarily public issues of corporate debt. Note that present value of the bond is made of two parts added together. [(cr x face value) / n ] {[1 (1/((1 + ytm)/n)nt)] / (ytm/n)} Pvb = a {[1 (1 / ((1 + i)/n)nt)] / (i/n)} + face value / (1 +ytm)nt. = a {[1 (1 / ((1 + i)/n)nt)] / (i/n)} Pv face value (lump sum at maturity, chpt 5)