Present and Future Values, and Expected Returns
We examined two important topics in finance this week: (a) present and future values and (b) security valuation.
Critically
reflect on the importance of present and future values. What factors
must be considered when calculating present and future values? What
other qualitative factors play into present and future value decisions?
Perhaps you have opportunities in your professional life to use present
and future values. What are some real or potential applications of these
concepts?
We also looked at expected returns. Why do
bond values go down when interest rates go up? Is this true in the
opposite direction?
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