concepts of duration and convexity

Q: Define the term declining-balance?

A: Depreciation: Depreciation refers to the reduction in the monetary value of a fixed asset due to its…

Q: Define actuarial rate of return

A: Definition: Actuarial rate of return is the expected value of losses of an insurance company that…

Q: Why are some analyses called horizontal and others calledvertical?

A: In order to identify the reason behind that some analyses are called horizontal and others are…

Q: What is the incremental analysis?

A:

Q: A) What is VAT? what is the difference between input and output VAT?

A: Comment - We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: Define geometric-gradient-series?

A: When there is a change in the cash flows series whether it is positive or negative then the series…

Q: Explain the following concepts? a. Off-sheet analysis. b. Horizontal analysis. c. Vertical analysis.…

A: a. Off-sheet analysis: The analysis of the off balance sheet items, the assets and loans which are…

Q: From where has the concept DU pont Analysis comes?what’s the formula?

A: Ratio Analysis is the method of checking the company's operational efficiency, liquidity, and…

Q: What is meant by Remainderman?

A: The remainderman is a beneficiary that receives the principal left in an estate or trust after a…

Q: Define the term predictive value.

A: Predictive value refers to the fact that quality financial information can be used to base…

Q: What is lien?

A: Lien: This is a case or legitimate right against properties normally utilized as collateral so as to…

Q: What is LIBOR?

A: London Interbank bank offering rate (LIBOR): it's a financial interest rate between two bank or…

Q: What is R, the expected

A: The time value of money is a method to calculate the present value and future value of an…

Q: Explain the put call parity model. What are the advatages and disavantages of it?

A: Put-call parity characterizes the connection between calls, puts and the underlying assest price or…

Q: Explain the term differential analysis.

A: The term differential analysis is explained as follows:

Q: What is the value of Po?

A: Annuity is referred to a cash payment being made at regular intervals. It is a widely used concept…

Q: Describe the Internal-Rate-of-Return Criterion?

A: Internal rate of return (IRR) is defined as the rate of discount at which the NPV of human capital…

Q: Would you say this chart  is a technical or a fundamental analysis? Give reasons for your  answer?

A: The question is based on the concept of analysis of stock performance. Fundamental and technical…

Q: Define Covariance?

A: Portfolio management is a dynamic decision making process about investment. It is a continuous…

Q: Draw a figure to explain Elements of required return - establishing a MARR?

A: The figure is represented as below: Note: Values assumed

Q: variable(s) that are qualitative

A: Qualitative variable is a variable that varies with volume of activity which cannot be quantified in…

Q: What does the intrinsic value formula look like? Please explain the components of the formula.

A: Intrinsic value or the real value is the calculated value or anticipated value of a company’s stock…

Q: Which of the following statements is true ahout the fonward prio

A: Forward Price volatility can be defined as the increase or a decrease of 1 basis point in required…

Q: What is the difference between YTD and YoY return? Provide an example

A: In the question they have asked regarding YTD and YOY differences between them so they will be…

Q: What is the geometric-gradient-series present-worth factor?

A: Present worth: It is the present value of future cash flows. The gradient is a change occurring in…

Q: Working/Application of ABC analysis?

A: Solution Activity based coating (ABC) is a method of assigning overhead and indirect cost -Such as…

Q: Elements of required return - establish a MARR? Explain how/

A: Introduction: A capital investment to be appealing should have a return which goes beyond the…

Q: How can we compute the true IRR, or RIC, as a function of the MARR?

A: Minimum Acceptable rate of return is the minimum rate which the management wishes to have from any…

Q: Explain title Mechanics’ Liens?

A: Lien is a right of posession of an asset; in case, debts are not discharged by the owner of the…

Q: Discuss the concepts of duration and convexity.

A: Duration : Duration is the measure of sensitivity of a bond with respect to change in interest…

Q: What is ‘Fixed’ APR and ‘Variable’ APR?

A: APR is percentage  Annual rate of interest  charged on credit cards or mortgages or loans.

Q: What does the concept "substance over form" stand for?  Can you provide me with some examples?

A: Substance over form: It is an accounting concept, which means that the business must record those…

Q: Which of the following defines iterative calculation?

A: SPREADSHEET

Q: What is inverse floater?

A: Introduction: This question is related to the concept of financial derivatives. Derivative…

Q: Explain differential analysis

A: Differential Analysis involves understanding the purpose of different costs that may arise from…

Q: Distinguish between Current ratio and Quick ratio?

A: Ratio analysis: It refers to the quantitative technique of financial analysis that allows gaining an…

Liquidity Risk Exposure

Answer: c