AFF 502 Study Guide - Midterm Guide: Deferral, Poaceae, Vestment
Document Summary
Discount bond an investment that pays interest during its life, so the interest you receive on it is part of the final payment: k = cf1 cf0 / cf0. Geometric: multiply all factors (1+k) and take the nth root 1. Apr: m x km where m = # periods in 1 year & km = rate of return. Interest rate of 1%/mo has ear of 12. 68% Annuities: (annuity due is paid @ the beginning of a period) Constant growth annuity stream of pmt that grows at a constant rate. Pure time premium the price we demand for waiting before we consume. Nominal rate discount rate for inflated or current dollars. Real rate discount rate for un-inflated dollars. Chapter 3 setting goals & the financial planning process. Financial planning process: goal setting, action plan, take action, feedback (monitoring progress) Chapter 4 measuring & controlling personal finances.
