FIN 3101 Study Guide - Midterm Guide: Fisher Hypothesis, Amortization Schedule, Current Yield
21 Oct 2017
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Finance 3101: review list for exam # 2. Tvm lump sums (chapter 3: why tvm, how to construct and use time lines, meaning of pv and fv. What is involved with discounting and compounding: simple vs. compound interest. How pv formula embodies the 3 key factors determining stock prices. How changes in right-hand-side variables affect pv and fv. Relationship between pv and discount rate: rule of 72 in solving for r and n. Solving for fv, pv and pmt of multiple cash flows. Solving for targeted savings by retirement and savings required to reach target. Solving for loan amounts and fixed payments for fully-amortized loans. Interest rates & bonds (chapters 5 & 6) Periodic interest rate, apr, frequency of compounding and ear. Solving for approximate nominal and real interest rates. Relative magnitude of four components of historical nominal interest rates. Bond ratings, credit quality and required rates of return. Solving for the price of a bond (cid:1005)(cid:1004).
