The discount rate used in a net present value analysis is the​ ________.   A. rate of interest earned on a savings account   B. rate of inflation   C. rate of interest charged for debt financing of an investment   D. required rate of return or the hurdle rate

Q: What is the bank's return on assets (ROA)? Write your answer as a percent rate.

A: Financial ratios are those which provide a summary of the accounts of a company and helps an…

Q: Which of the following method is not based on concept of time value of money? A. Discounted payback…

A: Time value of money is based on the concept, that money you have today worth more than it in the…

Q: In an interest rate swap borrower pays   O a. Premium   O b. Coupon cashflows   O c. Repayment…

A: In interest rate swaps, one stream of future interest payment is exchanged for another based on…

Q: Compare and contrast dollar returns and rates of return.

A: The returns from any investment can be calculated in terms of value (amount terms) or percentages.

Q: b) At what yield (or rate) will the loan be trading at par? Explain whether it is trading above or…

A: Bond price is the price of the bond when future cash flows are discounted at the market yield.…

Q: Define effective annual rate (EAR) with examples. Differentiate between annuity cash flows and mixed…

A: Nominal interest rate (annual interest rate) is the annual rate without effect of compounding.

Q: Analyze credit risk in the past and current years Analyze profitability in the past and current…

A: Credit analysis is the process of analysing the possibility of the borrower of defaulting the…

Q: a. what is the difference between the discount rate used for net present value and the internal rate…

A: Discount rate used for net present value is rate which investor want to earn from a project . It is…

Q: Nominal values are measured in ________ and real values take account of

A: Given  Nominal values are measured ? Real values taken account of?

Q: Consider the monetary policy rule under financial frictions. If f >0 the prevailing market real the…

A: Consider the monetary policy rule under financial frictions.

Q: When the total interest charged is linearly proportional to the initial amount of the loan, the…

A: Interest is an additional amount that is charged on deposited amount for a period. Interest is an…

Q: Charecteristics Model approach IN FINANCE, can be used in determining the discount rate in equity…

A: The discount rate in the equity valuation describes the returns in the long term given as a…

Q: Estimating liquidity needs involves: A. forecasting the level of future loan commitments and…

A: Liquidity is the need of funds

Q: The static GAP focuses on monitoring net interest income in the long term.   Select one: True…

A: The Static GAP focuses on monitoring net interest income in the short term but it can be calculated…

Q: Which of the following statements is true about the present value factors? The present value factor…

A: Present value interest factor is used to determine the present value of series of future annuities.…

Q: The discount rate is the combination of what two types of discounting?   a. exponential and linear…

A: Discount rates are used for discounting the future cash flows. It helps in determining the time…

Q: Other elements being constant, the increase in an “interest receivable” account will lead to the…

A: Interest Receivable is a form of current asset owned by the company. It means interest that has been…

Q: Return on equity is: the rate of return that owners earn on their investment O the relationship of…

A: Return on equity can be defined as the earning on the equity as hold by the equity shareholders of…

Q: Which of the following methods consider the time value of money? A. payback and accounting rate of…

A: Time Value of Money The time value of money is the concept that money you have now is worth more…

Q: Describe the essential differences between the following cash flow streams: Annuity versus…

A: The difference in the cash flows will arise due to the change in the time period which is associated…

Q: What is the difference between-1 accounting and Finance? answer this ?question with suitable example…

A: The difference between accounting and finance is as follows:

Q: A bank is least likely to use which of the following ratioswhen analyzing the likelihood that a…

A: Ratio Analysis:  This refers to the performance measurement of the business, in order to know the…

Q: For short term credit decisions which ratio is used? Select one: O a. Current Ratio O b. None O c.…

A: Explanation: Short term credit decision are made by the company are related to the financing needs…

Q: The borrowing cost to be capitalized in general borrowing cost is the lower between the amount…

A: General borrowing cost refers to the borrowing cost like interest expense, finance charges on the…

Q: The elasticity of the change of the price of debt toward the change in interest rate is the absolute…

A: Duration is a measure of the sensitivity of the price of a bond or other debt instrument to a change…

Q: Discuss briefly the liquidity preference theory (LFT) and differentiate it from the loanable funds…

A: Liquidity is referred as the degree, where the security used to buy or sell quickly in the market at…

Q: Explain or illustrate before-tax cost of debt and after-tax cost of debt. 5. What are the…

A: The equity source and debt source of financing is considered to be important in capital structure.…

Q: During a period of inflation, an account balance remains constant. With respect to this account, a…

A: Monetary items refers to those assets and liabilities whose value can be measured and expressed in…

Q: a. Determine the interest rate if the money was compounded continuously. b. Determine the effective…

A: Effective annual rate (EAR) refers to a real interest rate which an investor is expect from his…

Q: How would an increase in the interest rate or a decrease in the number of periods until the payment…

A: Interest rate is defined as an amount of an interest due per period as the proportion of amount,…

Q: Which of the following theories can be assessed using data that exists at one specific point in…

A: Purchasing power parity: Purchasing power parity (PPP) is a concept which means that exchange rates…

Q: REATE AN EXAMPLE PROBLEM WITH CASHFLOW a.) nominal compound interest  b.) continuous compound…

A: Solution Example of nominal compound interest Calculate the future value of $12345 deposited today…

Q: In describing investments and loans, the stated interest rate is known as the rate. or O periodic or…

A: Stated interest rate is the rate of interest which actually a borrower pays or the rate of interest…

Q: What-if forecasting provides information regarding how much net interest income changes when…

A: Interest is the fee given to an investor or a depositor of fund for the decreased time value of…

Q: The following tutorial questions serve as practice questions on TVM and Bond Valuation. (Answer Both…

A: a- Future Value b- Discounting c- Net Present Value d- Accumulated Interest e- Compounding of…

Q: The actual interest paid or earned is commonly referred to as the:   a. Risk premium. b. Annual…

A: Risk premium is the excess return a investor will earn over the risk free return of the investment.…

Q: clarely distinguish between nominal internest rate and effective interest rate

A: Nominal interest rate are simple interest rates that don't consider the effect of compounding.…

Q: Which method does not consider the time value of money? Choose the correct. A. Net present value…

A: Net Present Value or NPV is a technique which determines the net present value of the project and it…

Q: What is expectations theory of the term structure of interest rates? Group of answer choices a.…

A: There are three theories based on term structure of interest rate namely Expectation theory, Market…