<t>Hi,My question is with respect to the following article : IMF says global financial risks harder to spot.This is what I understand by risk : the chance that an investment's actual return will be different than expected. Risk includes the possibility of losing some or all of the original investmen...

<t>Hi,The following paragraph is from this article. The bold part is not clear to me. How would focusing on illiquid collateral would have removed the excess liquidity problem? Would someone please help me understand that?Central banks have not been doing the job of market maker of last resort effec...

<t>Hi,Please refer to the following below. I am not sure how a court in a country can exercise authority over the matters of another country. Also, what could the US court or the US do if Argentina went ahead and paid the amounts due to its other bondholders? Is the fact that Argentina would have ha...

Thanks. I have seen a guy use only year-end yields to calculate bond returns as follows:annual return on a constant maturity bond = promised yield at the start of the year +/- price change due to interest rate changes.The attached file shows his calculations? . Is this a good approach?

<t>Hi, I need to find the relationship between the monthly returns of an equity index and the interest rate. I want to use the 10-year treasury yield as the proxy for the rate. While I am able to calculate the monthly returns using the Index?s price series, I don?t know how to calculate the monthly ...

<t>QuoteOriginally posted by: edouardQuote1. I feel that in the long run Island B would have a larger economy and a higher GDP/capita than that of Island A. Is that correct? What could be the rationale behind?This is what I think will happen, assuming the right socio-political conditions are in plac...

<t>HIConsider two island economies, A and B. Both islands are similar in terms of population, climate and natural resources, but they are not connected by any way. The only difference between them is Island A's population lives a life of frugality and simplicity. On the other hand, Island B is a con...

<t>Hi,I am trying to understand how to interpret the following info from a purely economic point of view. Especially, what caused the increase in the value of corporate equities?"In 1980, the total value of all U.S. corporate equities was $1.569 trillion. By 1990, that value had risen to $3.544 tril...

The discount rate is the wtd. avg. of the cost of equity and the cost of debt. The assets are funded with 50% debt. I think We need to discount the cash flows with the correct cost of capital.

This situation is simpler than that. I am not including any tax impact.

<r>Hi,This is a conceptual question. I am confused with a DCF situation. The Excel file stored at the following link has my calculations. <URL url="http://www.filedropper.com/dcfquestion">http://www.filedropper.com/dcfquestion</URL> I am trying to do a very simple three-period DCF by two methods: 1....

<t>Hi ,I have a simple questions. There are two barbers; Barber D lives in a developing nation, say Indonesia, and Barber E lives in the US. Both work as employees in barber shops and give about the same haircuts every day. While Barber E?s income is sufficient to allow him to take his family on a v...

Hi,Assume that I am the only equity holder in the fund, investing $100 in the fund. The fund manager borrows an additional $100 and invests the total capital of $200. Is the 2% annual fee charged on my equity capital of $100 or on the total invested capital of $200?Thanks.

<t>QuoteThere's another issue at stake here, too -- differential access to capital. If the land owner has a lower cost of capital than the tenant (e.g., the tenant is a mom-and-pop operation), then the land owner will reap higher returns by constructing and leasing the building than from selling the...

<t>Thanks.QuoteBut in situation #1, the tenant reaps only a fraction of returns on R&M (the fraction that accrues to the short-term incremental value of the business cash flow). To the extent that the long-term capital asset value of the land (the location) is a function of the expected short-te...