GEORGE MASON UNIVERSITYSchool of ManagementEMBA 703 Financia.docxbudbarber38650
GEORGE MASON UNIVERSITY
School of Management
EMBA 703 Financial Markets
Dr. Hanweck
Final Examination
Fall 2013
NAME: ___________________________________
G-code: _____________________________
Answer all questions. Place your answer to each question on a separate sheet of paper. Please write your name on the top left corner of each page. Document your answers and show your work. Read each question carefully and answer all parts. Try and answer something on each question. Your guess may turn out to be correct. The number in parentheses is the point weight for the question. Attach the exam to your answers.
(15)
1.(a)
Discuss various measures of capital market efficiency and how efficient capital markets contribute to the efficiency in the market for goods and services (including productive capital). As part of your discussion, consider the implications of the fact that the bulk of trading in capital markets is in outstanding securities and analyze the meaning of the terms "depth," "breadth," and "resiliency" as descriptions of capital markets. Include in your discussion the types of legislative and regulatory reforms that might be or have recently been instituted in order to improve the efficiency of capital markets and the role of "insider trading" and the SEC as they affect market efficiency.
(b)
Compare money and capital markets and identify the major issuers of securities in the different markets and the difference among the various types of securities within and between each of the markets. Within your discussion of the money markets include a consideration of the role of the Federal Reserve System (Fed) and the banking system as they interact through required reserve maintenance, needs for liquidity and monetary policy actions by the Fed. Consider in your analysis the types and significance of the links between the money and capital markets via the term structure of interest rates, issuers of debt and equity and the presence of interest rate and credit risk derivatives.
(10)
2. There are a number of theories of the term structure of interest rates including the unbiased expectations hypothesis, preferred habitat hypothesis, and market segmentation hypothesis. Discuss the implications of the unbiased expectations hypothesis within the context of the following problem. Problem 1: For a two year, default free, zero coupon security, compute its yield to maturity and draw the respective yield curves assuming two different expectations of inflation employing the Fisher Effect and the data below: (a) 4 percent one year from now, and (b) 2 percent one year from now. In addition, define and compute the implied forward yield on a one year security one year from now, assuming the current two year yield is 6.0 percent. Discuss the assumptions underlying this calculation and how it can be used to evaluate the implied forward yield on a 1-year loan, next year. (c) Wh.
Ch05 P24 Build a Model Spring 1, 201372212Chapter 5. Ch 05 P24 B.docxtidwellveronique
Ch05 P24 Build a Model Spring 1, 20137/22/12Chapter 5. Ch 05 P24 Build a ModelExcept for charts and answers that must be written, only Excel formulas that use cell references or functions will be accepted for credit. Numeric answers in cells will not be accepted.A 20-year, 8% semiannual coupon bond with a par value of $1,000 may be called in 5 years at a call price of $1,040. The bond sells for $1,100. (Assume that the bond has just been issued.)Basic Input Data:Years to maturity:20Periods per year:2Periods to maturity:Coupon rate:8%Par value:$1,000Periodic payment:Current price$1,100Call price:$1,040Years till callable:5Periods till callable:a. What is the bond's yield to maturity?Periodic YTM =Annualized Nominal YTM = Hint: This is a nominal rate, not the effective rate. Nominal rates are generally quoted.b. What is the bond's current yield?Current yield = Hint: Write formula in words.Current yield =/ Hint: Cell formulas should refer to Input SectionCurrent yield =(Answer)c. What is the bond's capital gain or loss yield?Cap. Gain/loss yield =- Hint: Write formula in words.Cap. Gain/loss yield =- Hint: Cell formulas should refer to Input SectionCap. Gain/loss yield =(Answer)Note that this is an economic loss, not a loss for tax purposes.d. What is the bond's yield to call?Here we can again use the Rate function, but with data related to the call.Peridodic YTC =Annualized Nominal YTC =This is a nominal rate, not the effective rate. Nominal rates are generally quoted.The YTC is lower than the YTM because if the bond is called, the buyer will lose the difference between the call price and the current price in just 4 years, and that loss will offset much of the interest imcome. Note too that the bond is likely to be called and replaced, hence that the YTC will probably be earned.NOW ANSWER THE FOLLOWING NEW QUESTIONS:e. How would the price of the bond be affected by changing the going market interest rate? (Hint: Conduct a sensitivity analysis of price to changes in the going market interest rate for the bond. Assume that the bond will be called if and only if the going rate of interest falls below the coupon rate. That is an oversimplification, but assume it anyway for purposes of this problem.)Nominal market rate, r:8%Value of bond if it's not called:Value of bond if it's called: The bond would not be called unless r<coupon.We can use the two valuation formulas to find values under different r's, in a 2-output data table, and then use an IFstatement to determine which value is appropriate:Value of Bond If:Actual value,Not calledCalledconsideringRate, r$0.00$0.00call likehood:0%$0.00$0.00$0.002%$0.00$0.00$0.004%$0.00$0.00$0.006%$0.00$0.00$0.008%$0.00$0.00$0.0010%$0.00$0.00$0.0012%$0.00$0.00$0.0014%$0.00$0.00$0.0016%$0.00$0.00$0.00f. Now assume the date is 10/25/2010. Assume further that a 12%, 10-year bond was issued on 7/1/2010, pays interest semiannually (January 1 and July 1), and sells for $1,100. Use your ...
Fixed Income Securities Yield Measures.pptxanurag202001
Sources of Return
Yield Measures for Fixed-Rate Bonds
Yield to Call
Yield to Put
Yield to Worst
Cash Flow Yield
Yield Measures for Floating Rate Notes
Yield Measures for Money Market Instruments
Theoretical Spot rates (Bootstrapping)
Derivation of Forward Rates
Yield Spreads
Riding the Yield Curve
GEORGE MASON UNIVERSITYSchool of ManagementEMBA 703 Financia.docxbudbarber38650
GEORGE MASON UNIVERSITY
School of Management
EMBA 703 Financial Markets
Dr. Hanweck
Final Examination
Fall 2013
NAME: ___________________________________
G-code: _____________________________
Answer all questions. Place your answer to each question on a separate sheet of paper. Please write your name on the top left corner of each page. Document your answers and show your work. Read each question carefully and answer all parts. Try and answer something on each question. Your guess may turn out to be correct. The number in parentheses is the point weight for the question. Attach the exam to your answers.
(15)
1.(a)
Discuss various measures of capital market efficiency and how efficient capital markets contribute to the efficiency in the market for goods and services (including productive capital). As part of your discussion, consider the implications of the fact that the bulk of trading in capital markets is in outstanding securities and analyze the meaning of the terms "depth," "breadth," and "resiliency" as descriptions of capital markets. Include in your discussion the types of legislative and regulatory reforms that might be or have recently been instituted in order to improve the efficiency of capital markets and the role of "insider trading" and the SEC as they affect market efficiency.
(b)
Compare money and capital markets and identify the major issuers of securities in the different markets and the difference among the various types of securities within and between each of the markets. Within your discussion of the money markets include a consideration of the role of the Federal Reserve System (Fed) and the banking system as they interact through required reserve maintenance, needs for liquidity and monetary policy actions by the Fed. Consider in your analysis the types and significance of the links between the money and capital markets via the term structure of interest rates, issuers of debt and equity and the presence of interest rate and credit risk derivatives.
(10)
2. There are a number of theories of the term structure of interest rates including the unbiased expectations hypothesis, preferred habitat hypothesis, and market segmentation hypothesis. Discuss the implications of the unbiased expectations hypothesis within the context of the following problem. Problem 1: For a two year, default free, zero coupon security, compute its yield to maturity and draw the respective yield curves assuming two different expectations of inflation employing the Fisher Effect and the data below: (a) 4 percent one year from now, and (b) 2 percent one year from now. In addition, define and compute the implied forward yield on a one year security one year from now, assuming the current two year yield is 6.0 percent. Discuss the assumptions underlying this calculation and how it can be used to evaluate the implied forward yield on a 1-year loan, next year. (c) Wh.
Ch05 P24 Build a Model Spring 1, 201372212Chapter 5. Ch 05 P24 B.docxtidwellveronique
Ch05 P24 Build a Model Spring 1, 20137/22/12Chapter 5. Ch 05 P24 Build a ModelExcept for charts and answers that must be written, only Excel formulas that use cell references or functions will be accepted for credit. Numeric answers in cells will not be accepted.A 20-year, 8% semiannual coupon bond with a par value of $1,000 may be called in 5 years at a call price of $1,040. The bond sells for $1,100. (Assume that the bond has just been issued.)Basic Input Data:Years to maturity:20Periods per year:2Periods to maturity:Coupon rate:8%Par value:$1,000Periodic payment:Current price$1,100Call price:$1,040Years till callable:5Periods till callable:a. What is the bond's yield to maturity?Periodic YTM =Annualized Nominal YTM = Hint: This is a nominal rate, not the effective rate. Nominal rates are generally quoted.b. What is the bond's current yield?Current yield = Hint: Write formula in words.Current yield =/ Hint: Cell formulas should refer to Input SectionCurrent yield =(Answer)c. What is the bond's capital gain or loss yield?Cap. Gain/loss yield =- Hint: Write formula in words.Cap. Gain/loss yield =- Hint: Cell formulas should refer to Input SectionCap. Gain/loss yield =(Answer)Note that this is an economic loss, not a loss for tax purposes.d. What is the bond's yield to call?Here we can again use the Rate function, but with data related to the call.Peridodic YTC =Annualized Nominal YTC =This is a nominal rate, not the effective rate. Nominal rates are generally quoted.The YTC is lower than the YTM because if the bond is called, the buyer will lose the difference between the call price and the current price in just 4 years, and that loss will offset much of the interest imcome. Note too that the bond is likely to be called and replaced, hence that the YTC will probably be earned.NOW ANSWER THE FOLLOWING NEW QUESTIONS:e. How would the price of the bond be affected by changing the going market interest rate? (Hint: Conduct a sensitivity analysis of price to changes in the going market interest rate for the bond. Assume that the bond will be called if and only if the going rate of interest falls below the coupon rate. That is an oversimplification, but assume it anyway for purposes of this problem.)Nominal market rate, r:8%Value of bond if it's not called:Value of bond if it's called: The bond would not be called unless r<coupon.We can use the two valuation formulas to find values under different r's, in a 2-output data table, and then use an IFstatement to determine which value is appropriate:Value of Bond If:Actual value,Not calledCalledconsideringRate, r$0.00$0.00call likehood:0%$0.00$0.00$0.002%$0.00$0.00$0.004%$0.00$0.00$0.006%$0.00$0.00$0.008%$0.00$0.00$0.0010%$0.00$0.00$0.0012%$0.00$0.00$0.0014%$0.00$0.00$0.0016%$0.00$0.00$0.00f. Now assume the date is 10/25/2010. Assume further that a 12%, 10-year bond was issued on 7/1/2010, pays interest semiannually (January 1 and July 1), and sells for $1,100. Use your ...
Fixed Income Securities Yield Measures.pptxanurag202001
Sources of Return
Yield Measures for Fixed-Rate Bonds
Yield to Call
Yield to Put
Yield to Worst
Cash Flow Yield
Yield Measures for Floating Rate Notes
Yield Measures for Money Market Instruments
Theoretical Spot rates (Bootstrapping)
Derivation of Forward Rates
Yield Spreads
Riding the Yield Curve
time value of money
,
concept of time value of money
,
significance of time value of money
,
present value vs future value
,
solve for the present value
,
simple vs compound interest rate
,
nominal vs effective annual interest rates
,
future value of a lump sum
,
solve for the future value
,
present value of a lump sum
,
types of annuity
,
future value of an annuity
Management of funds is a critical aspect of financial management. Management of funds acts as the foremost concern whether it is in a business undertaking or in an educational institution. Financial management, which is simply meant dealing with management of money matters.
Financial Management is efficient use of economic resources namely capital funds. Financial management is concerned with the managerial decisions that result in the acquisition and financing of short term and long term credits for the firm. Here it deals with the situations that require selection of specific assets, or a combination of assets and the selection of specific problem of size and growth of an enterprise. Herein the analysis deals with the expected inflows and outflows of funds and their effect on managerial objectives. In short, Financial Management deals with Procurement of funds and their effective utilization in the business.Management of funds is a critical aspect of financial management. Management of funds acts as the foremost concern whether it is in a business undertaking or in an educational institution. Financial management, which is simply meant dealing with management of money matters.
Financial Management is efficient use of economic resources namely capital funds. Financial management is concerned with the managerial decisions that result in the acquisition and financing of short term and long term credits for the firm. Here it deals with the situations that require selection of specific assets, or a combination of assets and the selection of specific problem of size and growth of an enterprise. Herein the analysis deals with the expected inflows and outflows of funds and their effect on managerial objectives. In short, Financial Management deals with Procurement of funds and their effective utilization in the business.
Management of funds is a critical aspect of financial management. Management of funds acts as the foremost concern whether it is in a business undertaking or in an educational institution. Financial management, which is simply meant dealing with management of money matters.
Financial Management is efficient use of economic resources namely capital funds. Financial management is concerned with the managerial decisions that result in the acquisition and financing of short term and long term credits for the firm. Here it deals with the situations that require selection of specific assets, or a combination of assets and the selection of specific problem of size and growth of an enterprise. Herein the analysis deals with the expected inflows and outflows of funds and their effect on managerial objectives. In short, Financial Management deals with Procurement of funds and their effective utilization in the business.
Management of funds is a critical aspect of financial management. Management of funds acts as the foremost concern whether it is in a business undertaking or in an educational institution. Financial management, Management of fund
FIN 340 Final Project Scenarios and Tables You will u.docxcharlottej5
FIN 340 Final Project Scenarios and Tables
You will use these scenarios and tables to complete the final project.
Client 1:
Ezra, age 26, is single. However, he is dating and preparing to get engaged. He will need roughly $5,000 for an engagement ring almost immediately, and expects
he will need $10,000–$15,000 for the wedding in the next 12–24 months. He is currently employed and earns about $70,000 a year in salary. This salary is
enough to cover all his taxes and normal living expenses of approximately $4,800. This leaves him with about $1,000 in savings each month ($350 to 401K, $650
to savings). He has been able to save roughly $15,000 to date in a 401K plan from work and about $20,000 in cash savings. His 401K plan has been invested 100%
in the stock market, including some sector-specific funds. His other savings have been in interest-bearing savings and cash substitutes such as money market
funds. He recently received a windfall of $60,000, and this prompted him to come to you for some advice. The following are few of Ezra’s comments to help
guide your thoughts:
1. “I understand I am young, so I need to take on as much risk as I can.”
2. “I am willing to lose 30–40% on my invested capital if the return is commensurate.”
3. “I do like to have a decent sized cushion in the bank in case something happens at my job.”
4. “I don’t foresee my risk tolerance changing after I get married.”
5. “Do you have any good stock tips?”
Client 2:
Jacob and Rachel, 53 and 52 respectively, are married with four children. Two of the children are currently in college, and two are in high school. They expect the
other two children to attend college. The couple has done relatively well for themselves and earn roughly $275,000 before tax between the two of them, which
equates to $190,000 after taxes. They live well below their means, and this should allow them to cover all of their children’s college expenses out of pocket, but
it will not leave much for them to save over the next six to eight years. Through savings and portfolio growth, they have managed to accumulate $900,000. To
this point, they have been moderately aggressive (70–75% equities) with their portfolio, but they feel that they need to begin preparing the portfolio for partial
retirement in eight years, and full retirement in 13 years.
1. “I know we still need to be somewhat aggressive—we could live until we’re 90—so we need to plan for some growth even in retirement.”
2. “We definitely can’t afford to take a big hit in our portfolio. We don’t have enough time to recover.”
3. “Our jobs allow us to work part-time in retirement, and we will probably do so as long as we are able.”
4. “What do bond yields look like today?”
5. “I think we’ll need to draw on 3–5% of our portfolio in retirement. We’d like to earn enough income from the portfolio to cover that.”
CAPM Inputs:
Market Return 9%
Risk-free Rate 0.75%
Stock Analysis Table:
.
Taurus Zodiac Sign_ Personality Traits and Sign Dates.pptxmy Pandit
Explore the world of the Taurus zodiac sign. Learn about their stability, determination, and appreciation for beauty. Discover how Taureans' grounded nature and hardworking mindset define their unique personality.
Personal Brand Statement:
As an Army veteran dedicated to lifelong learning, I bring a disciplined, strategic mindset to my pursuits. I am constantly expanding my knowledge to innovate and lead effectively. My journey is driven by a commitment to excellence, and to make a meaningful impact in the world.
time value of money
,
concept of time value of money
,
significance of time value of money
,
present value vs future value
,
solve for the present value
,
simple vs compound interest rate
,
nominal vs effective annual interest rates
,
future value of a lump sum
,
solve for the future value
,
present value of a lump sum
,
types of annuity
,
future value of an annuity
Management of funds is a critical aspect of financial management. Management of funds acts as the foremost concern whether it is in a business undertaking or in an educational institution. Financial management, which is simply meant dealing with management of money matters.
Financial Management is efficient use of economic resources namely capital funds. Financial management is concerned with the managerial decisions that result in the acquisition and financing of short term and long term credits for the firm. Here it deals with the situations that require selection of specific assets, or a combination of assets and the selection of specific problem of size and growth of an enterprise. Herein the analysis deals with the expected inflows and outflows of funds and their effect on managerial objectives. In short, Financial Management deals with Procurement of funds and their effective utilization in the business.Management of funds is a critical aspect of financial management. Management of funds acts as the foremost concern whether it is in a business undertaking or in an educational institution. Financial management, which is simply meant dealing with management of money matters.
Financial Management is efficient use of economic resources namely capital funds. Financial management is concerned with the managerial decisions that result in the acquisition and financing of short term and long term credits for the firm. Here it deals with the situations that require selection of specific assets, or a combination of assets and the selection of specific problem of size and growth of an enterprise. Herein the analysis deals with the expected inflows and outflows of funds and their effect on managerial objectives. In short, Financial Management deals with Procurement of funds and their effective utilization in the business.
Management of funds is a critical aspect of financial management. Management of funds acts as the foremost concern whether it is in a business undertaking or in an educational institution. Financial management, which is simply meant dealing with management of money matters.
Financial Management is efficient use of economic resources namely capital funds. Financial management is concerned with the managerial decisions that result in the acquisition and financing of short term and long term credits for the firm. Here it deals with the situations that require selection of specific assets, or a combination of assets and the selection of specific problem of size and growth of an enterprise. Herein the analysis deals with the expected inflows and outflows of funds and their effect on managerial objectives. In short, Financial Management deals with Procurement of funds and their effective utilization in the business.
Management of funds is a critical aspect of financial management. Management of funds acts as the foremost concern whether it is in a business undertaking or in an educational institution. Financial management, Management of fund
FIN 340 Final Project Scenarios and Tables You will u.docxcharlottej5
FIN 340 Final Project Scenarios and Tables
You will use these scenarios and tables to complete the final project.
Client 1:
Ezra, age 26, is single. However, he is dating and preparing to get engaged. He will need roughly $5,000 for an engagement ring almost immediately, and expects
he will need $10,000–$15,000 for the wedding in the next 12–24 months. He is currently employed and earns about $70,000 a year in salary. This salary is
enough to cover all his taxes and normal living expenses of approximately $4,800. This leaves him with about $1,000 in savings each month ($350 to 401K, $650
to savings). He has been able to save roughly $15,000 to date in a 401K plan from work and about $20,000 in cash savings. His 401K plan has been invested 100%
in the stock market, including some sector-specific funds. His other savings have been in interest-bearing savings and cash substitutes such as money market
funds. He recently received a windfall of $60,000, and this prompted him to come to you for some advice. The following are few of Ezra’s comments to help
guide your thoughts:
1. “I understand I am young, so I need to take on as much risk as I can.”
2. “I am willing to lose 30–40% on my invested capital if the return is commensurate.”
3. “I do like to have a decent sized cushion in the bank in case something happens at my job.”
4. “I don’t foresee my risk tolerance changing after I get married.”
5. “Do you have any good stock tips?”
Client 2:
Jacob and Rachel, 53 and 52 respectively, are married with four children. Two of the children are currently in college, and two are in high school. They expect the
other two children to attend college. The couple has done relatively well for themselves and earn roughly $275,000 before tax between the two of them, which
equates to $190,000 after taxes. They live well below their means, and this should allow them to cover all of their children’s college expenses out of pocket, but
it will not leave much for them to save over the next six to eight years. Through savings and portfolio growth, they have managed to accumulate $900,000. To
this point, they have been moderately aggressive (70–75% equities) with their portfolio, but they feel that they need to begin preparing the portfolio for partial
retirement in eight years, and full retirement in 13 years.
1. “I know we still need to be somewhat aggressive—we could live until we’re 90—so we need to plan for some growth even in retirement.”
2. “We definitely can’t afford to take a big hit in our portfolio. We don’t have enough time to recover.”
3. “Our jobs allow us to work part-time in retirement, and we will probably do so as long as we are able.”
4. “What do bond yields look like today?”
5. “I think we’ll need to draw on 3–5% of our portfolio in retirement. We’d like to earn enough income from the portfolio to cover that.”
CAPM Inputs:
Market Return 9%
Risk-free Rate 0.75%
Stock Analysis Table:
.
Taurus Zodiac Sign_ Personality Traits and Sign Dates.pptxmy Pandit
Explore the world of the Taurus zodiac sign. Learn about their stability, determination, and appreciation for beauty. Discover how Taureans' grounded nature and hardworking mindset define their unique personality.
Personal Brand Statement:
As an Army veteran dedicated to lifelong learning, I bring a disciplined, strategic mindset to my pursuits. I am constantly expanding my knowledge to innovate and lead effectively. My journey is driven by a commitment to excellence, and to make a meaningful impact in the world.
"𝑩𝑬𝑮𝑼𝑵 𝑾𝑰𝑻𝑯 𝑻𝑱 𝑰𝑺 𝑯𝑨𝑳𝑭 𝑫𝑶𝑵𝑬"
𝐓𝐉 𝐂𝐨𝐦𝐬 (𝐓𝐉 𝐂𝐨𝐦𝐦𝐮𝐧𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬) is a professional event agency that includes experts in the event-organizing market in Vietnam, Korea, and ASEAN countries. We provide unlimited types of events from Music concerts, Fan meetings, and Culture festivals to Corporate events, Internal company events, Golf tournaments, MICE events, and Exhibitions.
𝐓𝐉 𝐂𝐨𝐦𝐬 provides unlimited package services including such as Event organizing, Event planning, Event production, Manpower, PR marketing, Design 2D/3D, VIP protocols, Interpreter agency, etc.
Sports events - Golf competitions/billiards competitions/company sports events: dynamic and challenging
⭐ 𝐅𝐞𝐚𝐭𝐮𝐫𝐞𝐝 𝐩𝐫𝐨𝐣𝐞𝐜𝐭𝐬:
➢ 2024 BAEKHYUN [Lonsdaleite] IN HO CHI MINH
➢ SUPER JUNIOR-L.S.S. THE SHOW : Th3ee Guys in HO CHI MINH
➢FreenBecky 1st Fan Meeting in Vietnam
➢CHILDREN ART EXHIBITION 2024: BEYOND BARRIERS
➢ WOW K-Music Festival 2023
➢ Winner [CROSS] Tour in HCM
➢ Super Show 9 in HCM with Super Junior
➢ HCMC - Gyeongsangbuk-do Culture and Tourism Festival
➢ Korean Vietnam Partnership - Fair with LG
➢ Korean President visits Samsung Electronics R&D Center
➢ Vietnam Food Expo with Lotte Wellfood
"𝐄𝐯𝐞𝐫𝐲 𝐞𝐯𝐞𝐧𝐭 𝐢𝐬 𝐚 𝐬𝐭𝐨𝐫𝐲, 𝐚 𝐬𝐩𝐞𝐜𝐢𝐚𝐥 𝐣𝐨𝐮𝐫𝐧𝐞𝐲. 𝐖𝐞 𝐚𝐥𝐰𝐚𝐲𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞 𝐭𝐡𝐚𝐭 𝐬𝐡𝐨𝐫𝐭𝐥𝐲 𝐲𝐨𝐮 𝐰𝐢𝐥𝐥 𝐛𝐞 𝐚 𝐩𝐚𝐫𝐭 𝐨𝐟 𝐨𝐮𝐫 𝐬𝐭𝐨𝐫𝐢𝐞𝐬."
RMD24 | Debunking the non-endemic revenue myth Marvin Vacquier Droop | First ...BBPMedia1
Marvin neemt je in deze presentatie mee in de voordelen van non-endemic advertising op retail media netwerken. Hij brengt ook de uitdagingen in beeld die de markt op dit moment heeft op het gebied van retail media voor niet-leveranciers.
Retail media wordt gezien als het nieuwe advertising-medium en ook mediabureaus richten massaal retail media-afdelingen op. Merken die niet in de betreffende winkel liggen staan ook nog niet in de rij om op de retail media netwerken te adverteren. Marvin belicht de uitdagingen die er zijn om echt aansluiting te vinden op die markt van non-endemic advertising.
Affordable Stationery Printing Services in Jaipur | Navpack n PrintNavpack & Print
Looking for professional printing services in Jaipur? Navpack n Print offers high-quality and affordable stationery printing for all your business needs. Stand out with custom stationery designs and fast turnaround times. Contact us today for a quote!
As a business owner in Delaware, staying on top of your tax obligations is paramount, especially with the annual deadline for Delaware Franchise Tax looming on March 1. One such obligation is the annual Delaware Franchise Tax, which serves as a crucial requirement for maintaining your company’s legal standing within the state. While the prospect of handling tax matters may seem daunting, rest assured that the process can be straightforward with the right guidance. In this comprehensive guide, we’ll walk you through the steps of filing your Delaware Franchise Tax and provide insights to help you navigate the process effectively.
Enterprise Excellence is Inclusive Excellence.pdfKaiNexus
Enterprise excellence and inclusive excellence are closely linked, and real-world challenges have shown that both are essential to the success of any organization. To achieve enterprise excellence, organizations must focus on improving their operations and processes while creating an inclusive environment that engages everyone. In this interactive session, the facilitator will highlight commonly established business practices and how they limit our ability to engage everyone every day. More importantly, though, participants will likely gain increased awareness of what we can do differently to maximize enterprise excellence through deliberate inclusion.
What is Enterprise Excellence?
Enterprise Excellence is a holistic approach that's aimed at achieving world-class performance across all aspects of the organization.
What might I learn?
A way to engage all in creating Inclusive Excellence. Lessons from the US military and their parallels to the story of Harry Potter. How belt systems and CI teams can destroy inclusive practices. How leadership language invites people to the party. There are three things leaders can do to engage everyone every day: maximizing psychological safety to create environments where folks learn, contribute, and challenge the status quo.
Who might benefit? Anyone and everyone leading folks from the shop floor to top floor.
Dr. William Harvey is a seasoned Operations Leader with extensive experience in chemical processing, manufacturing, and operations management. At Michelman, he currently oversees multiple sites, leading teams in strategic planning and coaching/practicing continuous improvement. William is set to start his eighth year of teaching at the University of Cincinnati where he teaches marketing, finance, and management. William holds various certifications in change management, quality, leadership, operational excellence, team building, and DiSC, among others.
RMD24 | Retail media: hoe zet je dit in als je geen AH of Unilever bent? Heid...BBPMedia1
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2. Spot Rate
Yield Curve Should Not Be Used In Pricing B
The price of a bond is the sum of the present values of its
cash flows. In discounting the cash flows the discount rate
used should be the yield on a Treasury security with the
same maturity plus a spread or margin that is appropriate
with the risk. However, there is a problem with using
Treasury yield curve to determine the appropriate yield or
discount rate. The following example illustrates the
problem:
The two hypothetical 5-year Treasury bonds A and B have
coupon rates of 12% and 3% respectively. Therefore, the
semiannual cash flows are as follows:
Bond A: 1 – 9 time periods. CF = 6 Time period 10 CF=106
Bond B: 1 – 9 time periods. CF=1.5 Time period 10 CF=101.5
3. Spot Rate
Yield Curve Should Not Be Used In Pricing B
Because the cash flows are occurring at different points
in time, as such, it is incorrect to use the same interest
rate for discounting all the cash flows. Instead, each cash
flow should be discounted by a unique interest rate
appropriate for the time in which the cash flow is
occurring. The correct approach is to consider the bonds
A and B as packages of cash flows i.e. packages of zero-
coupon instruments. Therefore, the amount of interest is
the difference between maturity value and the price paid.
Bond A can be viewed as 10 zero-coupon bonds one with
a maturity value of 6 maturing 6 months from now, a
second with a maturity value of 6 maturing 12 months or
1 year from now, a third with a maturity value of 6
maturing 18 months or 1½ years from now & so on. The
4. Spot Rate
same is the case with Bond B. Therefore, the value of
the bonds should equal the total value of all the
component zero-coupon bonds. Otherwise, arbitrage
profit can be made.
To determine the value of each zero-coupon bond it is
necessary to know the yield on a zero-coupon Treasury
with the same maturity. This yield is called the spot rate
and the graphical depiction of the relationship between
the spot rate and maturity is called the spot rate curve.
As there are no zero-coupon Treasury debt issues with
a maturity greater than one year, it is not possible to
construct such a curve solely from observations of
market activity on Treasury securities. Rather it is
necessary to derive the curve from theoretical
considerations as applied to the yields of the actually
5. Spot Rate
traded Treasury debt securities. Such a curve is called a
theoretical spot rate curve and is the graphical
depiction of the term structure of interest rate.
Development of Theoretical Spot Rate Curve
for Treasuries
A default-free theoretical spot rate curve can be
constructed from the yield on Treasury securities. The
Treasury issues that can be considered are:
i) on-the-run Treasury issues
ii) on-the-run Treasury issues and selected off-the-
run Treasury issues
iii) all Treasury coupon securities and bills
iv) Treasury coupon strips
6. Spot Rate
The methodology of constructing the theoretical spot rate
curve varies on the basis of the type of securities included
for construction. The following two methods are used for
on-the-run Treasury issues:
On-the-Run Treasury Issues
These are the most recently auctioned issues of given
maturity. These issues include 3-month and 6-month
Treasury bills, 2-year, 5-year, and 10-year Treasury notes
and the 30-year Treasury bond. Treasury bills are zero-
coupon instruments and the notes and bonds are coupon
securities. There is an observed yield for each of the on-
the-run issues. For the coupon securities, these yields are
not the yields used in the analysis when the security is not
trading at par. Rather, for each on-the-run coupon
security, the estimated yield necessary to make the issue
7. Spot Rate
trade on par is used. The resulting on-the-run yield curve
is called the par coupon curve.
The objective is to develop a theoretical spot rate curve
with 60 semiannual spot rates: 6-month rate to 30-year
rate. Excluding the 3-month bill, there are only 6
maturity points available when only on-the-run issues
are used. The 54 missing points are interpolated from the
surrounding maturity points on the par yield curve. The
simplest and most commonly used interpolation method
is the linear extrapolation. On the basis of the yields at
two maturity points on the par coupon curve, the
following is calculated:
(yield at higher maturity – yield at lower maturity)
Number of semiannual periods between two maturity points + 1
The yield for all intermediate semiannual maturity points
is found by adding to the yield at the lower maturity the
8. Spot Rate
the amount computed from the formula. For example,
the yield from the par coupon curve for the 2-year and 5-
year on-the-run issues are 6% and 6.6% respectively.
There are 5 semiannual time periods between the two
maturity points. The extrapolated yield for the 2.5, 3,
3.5, 4, and 4.5 is computed as follows:
(6.6% – 6%)
6
= 0.1%
=
Therefore, 2.5-year yield = 6.0%+.1% = 6.1%
3.0-year yield = 6.1%+.1% = 6.2%
3.5-year yield = 6.2%+.1% = 6.3%
4.0-year yield = 6.3%+.1% = 6.4%
4.5-year yield = 6.4%+.1% = 6.5%
9. Spot Rate
There are two problems with using just the on-the-run
issues. First, there is a large gap between some of the
maturity points which may result in misleading yields
for those maturity points when estimated using the linear
extrapolation method. The problem is more prevalent in
case of gap between 5 and 10-year maturity points and
in case of 10 and 30-year maturity points. Second
problem is that as the true yields are different from the
quoted yields in the market, the yields of the on-the-run
issues themselves may be misleading.
The par yield curve can be converted to theoretical spot
rate curve by using bootstrapping. For example, for
computing theoretical spot rate curve for 10 years, 20
semiannual spot rates have to be computed. The
hypothetical par yield is shown in the Table where the
annualized yield (YTM), price, maturity, and computed
10. Spot Rate
spot rates of 20 Treasury securities are stated. The
coupon rate and YTM of the issues are same, as such,
their price is equal to par except for 6-month and 1-year
issues. It should be noted that all the analysis have been
done keeping in view the basic principle that the value of
treasury coupon security should be equal to the total
value of the package of zero-coupon Treasury securities
that copies or duplicates cash flows of the coupon bond.
The 6-month Treasury bill is a zero-coupon issue, as
such, its annualized yield 5.25% is equal to the spot rate.
Similarly, 1-year Treasury has a rate of 5.5% which is
equal to the 1-year spot rate. Considering these rates,
11. Spot Rate
the spot rate for the 1.5-year Treasury can be computed.
The price of theoretical 1.5-year zero-coupon Treasury
should equal to the total present value of three cash
flows from an actual 1.5-year coupon Treasury where
the yield used for discounting is the spot rate
corresponding to the cash flow. The Table shows coupon
rate for 1.5-year Treasury is 5.75% and price equal to
100 as it is trading at par.
Therefore, the semiannual coupon will be (5.75%
÷2)*100 = 2.875
Table shows coupon rate for 2-year Treasury is 6.0%
and as such, the semiannual coupon will be 3.0
12.
13.
14.
15. Forward Rate
It has been demonstrated how the theoretical spot rates
can be extrapolated from the yield curve. Similarly, the
market consensus future interest rates can also be
developed. The following example illustrates the
significance of the market consensus future interest
rates:
An investor with one-year investment horizon faces two
investment alternatives.
Alternative I: Buy a one-year instrument
Alternative II: Buy a 6-month instrument and when it matures
buy another 6-month instrument
16. Forward Rate
In case of the first alternative, the investor will realize
the 1-year spot rate with certainty. Whereas, with the
second alternative, the investor will realize the 6-month
spot rate for sure, but the 6-month rate 6 months from
now is unknown. As such, with the alternative II, the
rate that will be earned over one year time period is not
known with certainty. The following graph shows this.
17.
18. Forward Rate
The investor will be indifferent between the two
investment alternatives if they produce the same amount
of return over the 1-year investment horizon. Given the
1-year spot rate, there is some rate on a 6-month
instrument 6 months from now which will make the
investor indifferent between the two alternatives. That
rate is denoted by f. If the 1-year and 6-month spot rates
are known, then the rate f can be determined readily. If
100 is invested in 1-year instrument, then after one year
the amount will be 100*(1+z2)2 where z2 is the 1-year
spot rate. If 100 is invested in 6-month instrument then
after 6 months the amount will be 100*(1+z1) where z1
is the 6month spot rate.If this amount is reinvested at the
19. Forward Rate
6-month rate 6 months from now i.e. at rate f, the total
amount at the end of one year will be 100*(1+z1)*(1+f).
The investor will be indifferent if 100*(1+z1)*(1+f) =
100*(1+z2)2. If solved for f then
f = [(1+z2)2 ÷ (1+z1)] – 1
If the 6-month rate 6 months from now is less than the
computed forward rate then the investor will get more
return from alternative I, otherwise, the alternative II
will provide higher return to the investor. If the above
two rates are equal then the investor will be indifferent
between the two alternatives.
20. Forward Rate
The rate determined for f is called market’s consensus
for the 6-month rate 6 months from now. A future
interest rate calculated either from spot rate or the yield
curve is called the forward rate.
The notation that is used to indicate 6-month forward
rates is 1fm where the subscript 1 indicates a 1-period (6-
month) rate and the subscript m indicates the period
beginning m periods from now. When m is equal to zero,
this means the current rate. Thus, the first 6-month
forward rate is simply the current 6-month spot rate.
That is, 1f0 = z1.
21. Forward Rate
The general formula for determining a 6-month forward
rate is:
1fm = [(1 + zm+1)m+1 ÷ (1 + zm)m] −1
For example, assuming that the 6-month forward rate
four years (eight 6-month periods) from now is sought.
In terms of the notation, m is 8. The formula is then:
1f8 = [(1 + z9)9 ÷ (1 + z8)8] −1
From Exhibit 4, since the 4-year spot rate is 5.065% and
the 4.5-year spot rate is 5.1701%, z8 is 2.5325% and z9 is
2.58505%.
Then, 1f8 = [(1.0258505)9 ÷ (1.025325)8]− 1 = 3.0064%
22. Forward Rate
Using spot rates, any forward rate can be computed.
With the same arbitrage arguments as shown above to
derive the 6-month forward rates, any forward rate can
be obtained. There are two elements to the forward rate.
The first is when in the future the rate begins. The
second is the length of time for the rate. For example,
the 2-year forward rate 3 years from now means a rate
three years from now for a length of two years. The
notation used for a forward rate, f, will have two
subscripts—one before f and one after f i.e. t fm
The subscript before f is t and is the length of time that
the rate applies. The subscript after f is m and is when
the forward rate begins. That is, the length of time of the
forward rate f when the forward rate begins. The time
periods are 6-month periods.
23. Forward Rate
Given the above notation, here is what the following
mean:
Notation Interpretation for the forward rate
1f12 6-month (1-period) forward rate beginning 6 years
(12 periods) from now
2f8 1-year (2-period) forward rate beginning 4 years (8
periods) from now
6f4 3-year (6-period) forward rate beginning 2 years (4
periods) from now
8f10 4-year (8-period) forward rate beginning 5 years (10
periods) from now
24. Forward Rate
Derivation of The Forward Rate Formula
Consider the following two alternatives for an investor
who wants to invest for m + t time periods:
• buy a zero-coupon Treasury bond that matures in m + t
time periods, or
• buy a zero-coupon Treasury bond that matures in m
periods and invest the proceeds at the maturity date in a
zero-coupon Treasury bond that matures in t time
periods.
The investor will be indifferent between the two
alternatives if they produce the same return over the m +
t investment horizon. For example, if $100 is invested in
the first alternative, the proceeds for this investment at
the horizon date assuming that the semiannual rate is zm+t
is $100 (1 + z m+t )m+t
25. Forward Rate
Derivation of The Forward Rate Formula
For the second alternative, the proceeds for this
investment at the end of m periods assuming that the
semiannual rate is zm is $100 (1 + zm)m
When the proceeds are received in m periods, they are
reinvested at the forward rate, t fm, producing a value for
the investment at the end of m + t periods of $100 (1 +
zm)m(1 + t fm)t
For the investor to be indifferent to the two alternatives,
the following relationship must hold:
$100 (1 + zm+t )m+t = $100 (1 + zm)m(1 +tf m)t
Solving for tfm we get:
t fm = [(1 + zm+t )m+t ÷ (1 + z m)m]1/t − 1
26. Forward Rate
Derivation of The Forward Rate Formula
Notice that if t is equal to 1, the formula reduces to the
1-period (6-month) forward rate. To illustrate, for the
spot rates shown in Exhibit 4, suppose that an investor
wants to know the 2-year forward rate three years from
now. In terms of the notation, t is equal to 4 and m is
equal to 6. Substituting for t and m into the equation for
the forward rate we have:
4f6 = [(1 + z10)10 ÷ (1 + z6)6 ]¼ − 1
This means that the following two spot rates are needed:
z6 (the 3-year spot rate) and z10 (the 5-year spot rate).
From Exhibit 4 we know z6(the 3-year spot rate) =
4.752%/2 = 0.02376 z10(the 5-year spot rate) =
5.2772%/2 = 0.026386
Then 4 f6 = (1.026386)10− (1.02376)6 ¼ − 1 = 0.030338
27. Forward Rate
Derivation of The Forward Rate Formula
Therefore, 4 f6 is equal to 3.0338% and doubling this rate
gives 6.0675% the forward rate on a bond-equivalent
basis.
We can verify this result. Investing $100 for 10 periods
at the spot rate of 2.6386% will produce the following
value: $100 (1.026386)10 = $129.7499
Investing $100 for 6 periods at 2.376% and reinvesting
the proceeds for 4 periods at the forward rate of
3.030338% gives the same value:
$100 (1.02376)6(1.030338)4 = $129.75012