Explain CMO Price Behavior and Prepayment Rates?

Q: Differentiate between price risk and reinvestment risk.

A: Price risk is the risk of decline of the price of the investment or an asset after the underlying…

Q: Define Efficient Markets Hypothesis (EMH

A: EMH states that prices of the securities (like stocks) reflect all the available info and data. The…

Q: What is a marketorder?

A: Market order It is a request made by a financial specialist generally through an intermediate person…

Q: What is market model?

A: A market model is a numerical portrayal of the exchanges among different members, financial powers,…

Q: Define semistrong form of market efficiency

A: Answer: Efficient market is one where the market price constitutes a balanced estimate of…

Q: Define predatory pricing, dumping, and collusive pricing.

A: Target Costing:Target costing refers to the cost that is ascertained as per the needs and wants of…

Q: Present and Explain the theories of the Yield Curve?

A: The yield curve is a curve that shows the relationship between the interest rates and the different…

Q: Explain HPRs and Inflation?

A: Answer: Holding period returns (HPRs): Holding period return (HPR) is one of the investment…

Q: Arbitrage pricing theory is model developed to be used by:

A: Arbitrage is the practice of taking positive expected return from overvalued or undervalued…

Q: Define pricing decisions.

A: Selling Price:   It refers to the price at which the product or service will be sold in the market…

Q: What does ROI measure?

A: Return on Investment: Return on Investment is a profitability measure which determines a company's…

Q: What is the market model? How is it different from the SML forthe CAPM?

A: The market model is utilized to show how forces of supply and demand powers cooperate to decide…

Q: Explain the difference between market-based transfer prices and cost-based transfer prices.

A: Market based Transfer Price and Cost Based Transfer Price: Transfer pricing refers to the rules and…

Q: When should special pricing orders be accepted?

A: Special pricing order: A special order is a unique one time order made by a customer. In this order…

Q: What is Market Value Added (MVA)?

A: The market value added is the difference of the current value of the company and the equity capital…

Q: Distinguish between market-skimming pricing and market-penetration pricing.

A: Product pricing strategies: There are two product pricing strategies of a company. They are,…

Q: Critically discuss the efficient market hypothesis

A: Efficient Market Hypothesis: The market is effective in handling data . Markets are correctly and…

Q: Determining the best approach to pricing requires a cost-benefit trade-off. Explain.

A: The best approach to pricing requires the cost benefit trade-off is explained as below, The Best…

Q: what are the sssumptions about market efficiency?

A: The theory that states that all the information available in the capital market is reflected in the…

Q: What is market efficiency? Differentiate between weak and semi strong form efficiency

A: Market efficiency is the ability of markets to process the information quickly and generate the…

Q: Under what conditions is a market-based transfer price optimal?

A:

Q: What is market approach measurement?

A: The market approach is just like comparing one set of assets with another both having the same…

Q: Explain how cost-of-carry is a factor in forward curve prices.

A: Cost of carry is the costs of holding the certain position in the market or in other words it is the…

Q: Which IO or PO strips tend to be more volatile in the price? Why?

A: Interest-only (IO) could be a frame of bond that's designed from day by day coupon intrigued rate…

Q: impact the price of MYR?

A: MYR: MYR refers to the Malaysian Ringgit. It is the currency used in Malaysia. The value of 1 MYR is…

Q: What is target pricing? Who uses it?

A: Target pricing: A pricing method which is used to identify the price at which the product will be…

Q: What is internal rate of return (IRR) method?

A: NPV shows the excess of PV of all the cash inflows over the initial outlay of the project. It is a…

Q: What is market efficiency?

A: Market Efficiency term is taken from a paper written by Eugena Fama in 18970. Fama acknowledges that…

Q: Define “Market Value Added (MVA)” and “Economic Value Added(EVA).”

A: Introduction: Economic value added (EVA) and Market value added (MVA) are computations utilized to…

Q: Why do you think that having a price structure important?

A: Pricing strategies are the methods companies use to price products and services. Almost all…

Q: What is Transfer Pricing? What are the approaches in determining transfer prices? In your own…

A: Explanation of transfer pricing and approaches determining transfer pricing are as follows.

Q: What is the quantity decision? The pricing decision?

A:

Q: Define Arbitrage Pricing Theory (APT)

A: Arbitrage is the method of making profit from the temporary change in the cost of shares by buying…

Q: What is one potential limitation of full-cost-based transfer prices?

A: Full cost based transfer pricing means transfer price based on total product cost per unit which…

Q: Pricing Strategy

A: Answer: Pricing strategy refers to the method by which companies use to fix the prices for their…

Q: Outline the rules for identifying the optimal transfer price.

A: Transfer pricing:- Transfer pricing is considered as the value that is attached to those goods and…

Q: Briefly explain Purchasing Power Parity?

A: Purchasing Power Parity (PPP) is a theory of exchange rate determination. Purchasing power parity is…

Q: Explain price/EBITDA ratio

A: The EV/EBITDA ratio compares a company's enterprise value to its earnings before interest, taxes,…

Q: Identify the relative advantages and disadvantages of basing transfer prices on total costs,…

A: Please find the answers to the above questions below:

Q: Define dollar-value LIFO (DVL) and explain its advantages.

A: Dollar-value LIFO is an accounting method used for inventory that follows the last-in-first-out…

Q: Explain the following assertion: “Price setting generally requires a balance between market forces…

A: Businesses have to make a lot of decisions in running a business one of which is price setting. They…