1 – Module 2 Time value of money * How to compare monetary amounts you pay or receive at different times * The arithmetic with which we convert money between periods‚ or calculate what rate of return is implied by a given set of cash flows Single Period – Rate of Return * N = amount of years * I% = x (what we’re trying to find) * PV = How much it’s worth today * FV = How much it’s worth at maturity date * Discount bonds pay no interest during
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securities. Mr. Brown‚ an investor‚ would like to invest $ 5 million in various securities. He wishes to maximize his yearly profit over the next year. The investment company offered him a portfolio including Bonds‚ Stocks‚ Gold and Land. The expected return is 6% for Bonds‚ 14% for Stocks‚ 10% for Gold and 5% for Land. For diversification purposes‚ the maximum amount to be invested is $ 3 million in Bonds‚ $ 3 million in Stocks‚ $ 2 million in Gold and $ 1 million in Land. In addition to that‚ the investment
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1.0 Company Background 1.1 IOI Properties Bhd IOI Properties Berhad‚ an investment holding company‚ engages in the property development and property investment in Malaysia. Its investment properties include commercial/ office buildings‚ and shopping malls. The company also develops residential‚ commercial‚ and industrial properties‚ as well as provides building maintenance and general contract services. In addition‚ IOI Properties Berhad involves in the cultivation of oil palm; and the management
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Examining Stock Returns for Normal Distributions July11‚ 2012 Part A. A1 (CRSP 2000-2008) | VW Daily | EW Daily | VW Monthly | EW Monthly | Mean | 0.00% | 0.05% | -0.12% | 0.50% | σ | 1.35% | 1.12% | 4.66% | 6.14% | Table A1 shows return means and standard deviations for the CRSP market portfolio from 2000-2008. In comparing daily vs monthly returns in both cases‚ equally weighted (EW) and value weighted (VW)‚ Table A1 shows the mean and standard deviation are
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years_option=all_years&periods_option=specific_periods&periods=Annual+Data http://financeandinvestments.blogspot.com/2011/05/historical-annual-returns-for-s-500.html Jain‚ Rajiv‚ and Daniel Kranson. "The Myth of GDP and Stock Market Returns."2009. Web. 4 Mar. 2012. <http://www.virtus.com/vsitemanager/Upload/Docs/6141_GDPwhitepaper.pdf>. Rao‚ Rama. "Forecasting Future Returns." Financial Physics. N.p.‚ n.d. Web. 5 Mar 2012. <http://www.financialphysics.net/future.html>. Bekaert‚ Geert‚ and Campbell
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average‚ except average operating profit ratio and average net profit ratio. On the other hand IBN SINA Pharmaceuticals Ltd (IBN SINAPH)‚ it has not been able to attain the industry average gross profit‚ operating profit‚ return on investment‚ return on capital employed and return on equity. But it has succeeded to attain the standard norm for these ratios. Therefore its profitability may be considered to some extent satisfactory. It can be concluded that the profitability of pharmaceutical companies
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to that part of profits of a company which is distributed by the company among its shareholders. It is the reward of the shareholders for investments made by them in the shares of the company. The investors are interested in earning the maximum return on their investments and to maximize their wealth. A company‚ on the other hand‚ needs to provide funds to finance its long-term growth. If a company pays out as dividend most of what it earns‚ then for business requirements and further expansion
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a constant expected rate of return no matter the level of risk presumed by the corporation. Therefore‚ the low-risk Telecommunication division seems to be less profitable than the high-risk S&P division. Using a single hurdle rate will cause majority of the funds to be allocated to the P&S segment because its returns are high compared to the assumed overall profitability of the Corporation while that of Telecommunications will be starved for resources‚ since its returns are lower. On the other end
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projects. The required rate of return is 14.6 percent for project A and 13.8 percent for project B. Which project should you accept and why? project A; because it has the higher required rate of return project A; because its NPV is about $4‚900 more than the NPV of project B X project B; because it has the largest total cash inflow project B; because it has the largest cash inflow in year one project B; because it has the lower required return 2. A project has average net
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FINA104 GROUP BUSINESS CASE PRESENTATION 1ST Semester‚ Academic Year 2013-2014 Adapted from FUNDAMENTALS OF FINANCIAL MANAGEMENT‚ Twelfth Edition‚ by Eugene F. Brigham and Joel F. Houston‚ South-Western Cengage Learning Risk and Return Case. Assume that you recently graduated with a major in finance. You just landed a job as a financial planner with Merrill Finch Inc.‚ a large financial services corporation. Your first assignment is to invest $100‚000 for a client. Because the funds are to
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