What will be Effects of Changes in “Going-In” Cap Rates in Response toSupply and Demand?

Q: Who uses the original base period for the CPI index?Give an example?

A: CPI is the abbreviation used for the consumer price index. The combined weighted average value of…

Q: How is the revaluation surplus handled under the revaluation model?

A: The question is related to Revaluation model under IAS16 Property, Plant and Equipment. Under this…

Q: Which are the Methods for Finding Rate of Return?

A: A Rate of Return (ROR) is the gain or loss of an investment over a certain period of time. When the…

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: In a hyperinflationary economy, amounts not expressed to the measuring unit current at the end of…

A: This question is answered as per IAS 29 "Financial Reporting in Hyperinflationary Economies".

Q: Create a chart reflecting the conventional payback period?

A: The question is based on the calculation of payback period.

Q: Define the term internal rate of return?

A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…

Q: What is the marginal rate of return? How is it calculated?

A: Answer: Marginal rate of return can be defined as the return obtained or received by means of…

Q: Explain the Characteristics of super floating rate tranche?

A: Tranche:  The is the layers of pooled securities having different risk factors for different level…

Q: What are the differences between market ordersand limit orders?

A: Market orders might not be executed external of market times or if trading in a specific stock is…

Q: What causes the marginal rate of return to change over time?

A: Introduction: Marginal rate of return can be defined as the return attained or earned by holding a…

Q: ected rate of return concept differ from that of the rea

A: There are many method of valuation of stock based on expected rate and realized return and dividends…

Q: What causes cap rates to rise and fall? In this section, we introduce certain changes in market…

A: The capitalization rate is the rate at which the investments on real estate assets return annually.…

Q: What security provides a good estimate of the short-term nominalrisk-free rate?

A: T-bills are the treasury bills issued by the government. These bills are risk-free and the rate of…

Q: What security provides a good estimate of the long-term nominalrisk-free rate?

A: Risk-free Rate is the estimation of the rate that is earned on the securities or the investments…

Q: What makes the risk-adjusted discount rate approach appealing?

A: Answer: The approximation of the present cash value for high risk assets is called adjusted discount…

Q: Which different terms are used to refer to rate of return?

A: Rate of return is the return that is expected by the investors from the investment made. It is…

Q: What is Inflation Premium?

A: Inflation premium: An inflation premium is the piece of the common interest rate coming about…

Q: What is the purpose and workings of the Monetary policy transmission mechanism (MPTM)? What are the…

A: Monetary transmission technique or the mechanism is referred to as the process through which the…

Q: QI: Explain in details the Liquidity gaps time profiles and how the gap profiles changes.

A: In finance, liquidity refers to the ability of a business or an individual of converting its assets…

Q: Explain CMO Price Behavior and Prepayment Rates?

A: The question is based on the concept of Collateralized Mortgage Obligations (CMO) , interest rate…

Q: What makes the risk-adjusted discount rate approach appealing in practical application?

A: Answer: The discount rate may be changed to offset the risk involved in a project in order to…

Q: Explain super floating rate tranche?

A: Tranche:  The is the coatings of pooled securities having diverse risk factors for diverse level on…

Q: Define the term Risk-Adjusted Discount Rate Approach?

A: The estimation of the present value of cash for high-risk investment is known as a risk-adjusted…

Q: What is the present breakeven point in revenues?

A:

Q: How should changes in the estimated unguaranteedresidual value be handled by the lessor?

A:

Q: Create a chart reflecting the convention payback period?

A: The chart is presented below:

Q: what is the difference between a required rate of return and an expected rate of return?

A: Rate of return (ROR) is a value at which an investor earns additional amount on invested amount…

Q: Using the AD-AS model, demonstrate the potential causes of inflation

A: AD/ AS curve is demand and supply curve which shows the aggregate demand v/s aggregates supply in…

Q: Why inflation is considered and have effect in present value?

A: Inflation is the increase in the general price level of the country. It is an important indicator of…

Q: Which method should be used if management anticipates a periodof inflation? Why?

A: Inflation is a term that refers to increase in prices of commodities and services while purchasing…

Q: Is a cap rate the same as an IRR? Which is generally greater? Why?

A: The capitalization rate or cap rate cant be considered as similar to the IRR or the internal rate of…

Q: What is inflation premium (IP)?

A: Inflation premium is considered to be a very popular concept as this is considered to be a major…

Q: How sensitive is the NPV to changes in the quantity sold?

A: Net Present Value (NPV) is a capital budgeting technique which uses a discount rate to bring all the…

Q: How is the payback period is calculated?

A: Payback period is the amount or length of time taken by an investment to recover its cost.

Q: What is the Effective Rate per Payment Period?

A: Answer: The effective rate is nothing but the yearly rate under average compounding, will have…

Q: What is meant by the term payback period?

A: The Payback Period helps to determine the extent of time required to recoup the initial cash outlay…

Q: What is the difference between the regularand discounted payback periods?

A: The Regular Payback period is one of the capital budgeting techniques. It refers to the time period…

Q: what give rises to the changes in PBO balance?

A: PBO stands for the Projected Benefit Obligation. It shows how much the company would need in its…

Q: What is premium on forward rate?

A: A forward rate is referred as an interest rate which is applicable on financial transactions which…

Q: have led to a drop in the required rate of return?

A: Required Rate of return is the minimum rate of return which an investor expects for investing in a…

Q: In computing the WACC, what is the difference between using the current market value weights rather…

A: WACC A computation of an entity’s cost of capital in which every capital’s category is apportioned…