Q: Describe about different types of investment derivatives.
A: Derivatives: Derivatives are some financial instruments which are meant for managing risk and…
Q: Distinguish between (2) spot and futures markets
A: A financial market is the market where financial assets are created and traded. Financial assets are…
Q: What are the examples of Derivative Instruments? Define each examples and differentiate its nature…
A: Derivative is defined as the financial security along with the value, which used to be reliant or…
Q: Explain accounting for derivatives.
A: Derivatives: Derivatives are some financial instruments which are meant for managing risk and…
Q: Wich type of interest, the factor (F/P,i, n) replace?
A: While calculating compounding interest we have to find future value.
Q: The derivatives market allows for
A: Derivatives refer to the contract among various parties whose value depends on a set of assets or a…
Q: Define add-on interest
A: Add-on interest It the approach used for computing the amount of rate of interest required to pay on…
Q: Define each of the following terms:a. Option; call option; put option
A: Options: They are money related instruments subject to the derivatives of hidden protections, for…
Q: Explain the difference between simple and compound interest.
A: Simple Interest: It is the interest amount that is computed on the original amount of loan, that is,…
Q: Define each of the following terms: e. Swap; structured note
A: Swaps is an interchanging of cash payment obligations. It used by the firm so that they can reduce…
Q: Describe the uses of and accounting for derivatives
A: Accounting for derivatives: It is a method of recording a derivative holding of a company’s balance…
Q: Define compound interest
A: Compound interest: Compound interest is the accumulation of interest to the principal amount of a…
Q: What is derivatives market? Cite an example.
A: Before knowing the derivative market, let us know about the derivatives : The instruments which…
Q: What are Equal-Payment Series?
A: Equal payment refers to the equal net periodic cash flows that an investor receives during the life…
Q: Define swap
A: Swaps are the financial instruments that allow the company to revise their debt by taking advantage…
Q: Illustrate Derivatives?
A: Answer: A derivative is described as an investing technique defined to help the financial expert…
Q: Define derivatives
A: In Finance there are derivative contracts that derive its value from the underlying asset. This…
Q: Briefly explain the following a. Relation between present value and interest rate
A: Present value = Applying time value to the future cash flows using interest rates Present Value =…
Q: Explain the following terms, Bid Rate and Ask rate
A: Bid and Ask rates are two common rates used in financial markets especially in the foreign exchange…
Q: How are derivatives recorded?
A: Derivatives: Derivatives are some financial instruments which are meant for managing risk and…
Q: Distinguish between risk and return and briefly describe the relationship that exists between them.
A: Risk: It is the potential loss of an investor for investing in financial security based on his loss…
Q: What are the implications of interest rate parity theorem.
A: Interest rate Parity:- The interest rate parity (IRP) theory states that the difference between the…
Q: What do we mean by covered interest arbitrage parity? Explain in detail by a diagram.
A: Covered interest arbitrage: It is relationship between forward premium and interest rates. If…
Q: Example of someone use a derivative
A: Derivatives: These are the financial instrument, which derives their value from the price and the…
Q: Define each of the following terms:l. Interest rate risk; maturity risk premium (MRP); reinvestment…
A: Interest rate risk: Interest rate risk is the chance of a decay in the worth of an asset resultant…
Q: Which are two types of interest rates are used in equivalence calculations?
A: Equivalence calculation is used for analysis of an investment or a project based upon the the…
Q: Short note on derivatives.
A: Derivative: Derivative is a financial instrument whose value is derived from the underlying variable…
Q: What are the three principal types of REITs?
A: The question is based on the concept of Real Estate Investment trust (REIT). They are an investment…
Q: Discuss similarities and differences between futures contracts and forward contracts.
A: Under stock exchange, parties can have transactions through different types of contracts. Some…
Q: Define speculative balances
A: Speculation in simple terms can be associated with gambling. speculation is done on basis of guess…
Q: Define each of the following terms: f. Commodity futures
A: The futures contract refers to the contract that gives an obligation to the party to buy or sell a…
Q: Describe the Equivalence Calculations with Effective Interest Rates?
A: The effective interest rate is the real interest rate that is charged on the loan amount when the…
Q: What is a swap?
A: Derivative are those assets , in which their value are based on value of other assets. It includes…
Q: Describe briefly the nature of a swap and its primary component.
A:
Q: Define each of the following terms: g. Reinvestment rate assumption
A: reinvestment rate: it is the return the an investor expects to make after reinvesting the cashflow…
Q: Define each of the following terms:b. Adjusted present value (APV) model
A: Introduction: This question is related to the concept of accounting and finance. Corporate money…
Q: Using an example, explain how an interest swap works.
A: Solution- Statement-Interest swaps work Swap- Swap may be a forward contract painted by a…
Q: Define Premium.
A: Book value per share: This is a financial ratio which measures the value of shareholders’ equity…
Define each of the following terms:
a. Derivatives
Underlying assets are the financial assets which decide the value of the Derivatives.
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