THE TERM STRUCTURE OF INTEREST RATES The term structure theory assumes that investors in bonds are willing to purchase bonds of different times to maturity i.e. they do not have a “preferred habitat."

Q: Discuss the major characteristics of a theory.

A: Discussion of major characteristics of a theory

Q: For the second question, were you able to show how that problem would be worked out?

A: The par value is stated in the corporate charter and the company cannot issue shares below the par…

Q: Define the Base Case and the Proposed Alternatives?

A: The base case is the output expected from the basic assumption made by the project team. The basic…

Q: What are the steps to figure this out?

A: Journal: Recording of a business transactions in a chronological order.

Q: 6) Explain Realisation concept and provide example.

A: Accounting concepts are those rules, regulations and guidelines which are used for the…

Q: Explain materiality , happens and why these are important? Explain with the help of example.

A: Materiality refers to the concept of determining whether a particular item, transaction, or…

Q: Explain in detail, using examples where possible, the difference between hedging, speculation

A: In the world of finance and investments hedging and speculation are important concepts. Many…

Q: Why is a source document important? List some examples of source documents.

A: Source documents refers to the documents pertaining to a business transaction. It captures the key…

Q: What are the relative merits of input from source documents and direct input?

A: Definition: Direct input: The data that are directly inserted into the system from the source data…

Q: Realization Test Principle/Theory.

A: Accounting is based on some principles, and to maintain uniformity, everyone must follow accounting…

Q: Explain key features of DLT & mention its potential benefits.?

A: As the name suggests, Distributed Ledger is a database that is spread over multiple locations. These…

Q: Describe the assumptions underlying CVP analysis?

A: Cost-Volume-Profit Analysis (CVP Analysis): CVP Analysis is a tool of cost accounting that measures…

Q: How do you explain or interpret predictive model information?

A: Meaning- Predictive Model As the name suggest, where with the help of historical figures or even…

Q: Can another formula be used to get the answers?

A: Formula  for calculation of share price=Dividend last year*(1+ Growth rate)(Required rate of return-…

Q: What is materiality? Explain?

A: Materiality: The accounting concept which focusses that all the financial items and figures which…

Q: Explain the PSA prepayment model?

A: What Is a Prepayment Model? In lending, a prepayment model is used to estimate the level of…

Q: What is the actual formula used to get this answer?

A: Present value of annuity Annuity is a series of equal payments at equal interval over a specified…

Q: Define the term realization principle.

A: Accounting: Accounting refers to the information system, where the economic activities of a…

Q: Define and explain the significance of the term CMA.

A: Certified Management Accountant (CMA): CMA stands for certified management accountant. CMA…

Q: Can you make QBI more understandable? Are you able to describe the steps?

A: Qualified Business Income Deduction (QBID) It is  the final  deduction  to be made  before…

Q: What is the concept behind the EOQ model?

A: Economic Order Quantity (EOQ) Model: It is a method of inventory costing that aims to identify the…

Q: Explain FLSA and its purpose.

A: FLSA stands for fair Labor Standards Act. It is an act that aims at protecting the interest of…

Q: A company estimates that it will need $375,000 in 11 years to replace an important machine. If it…

A: We need to use future value of annuity formula to calculate payment size  PMT =FVn(1+i)n -1i Where…

Q: Explain subsequent events and why these are important? Explain with the help of example.

A: Subsequent events refer to events or transactions that occur after the balance sheet date but before…

Q: Explain what is meant by the term decision model.

A: Every business has to take important decisions now and then. A proper understanding of the situation…

Q: What is the full form of ERP? Explain ERP with examples?

A: ERP means Enterprise Resource Planning, it is a process management software used by organizations to…

Q: Can you explain DCF model?

A: Introduction Discounted cash flows: DCF is abbreviated as discounted cash flows. The concept of…

Q: Describe Caveats?

A: A notice that is given to the court that it must give caveator a fair hearing before making any…

Q: You are considering investing in ICI. Suppose ICI is currently undergoing expansion and is not…

A: Given: Dividend for 4 years = $3 Growth rate = 30% Required return = 11%

Q: 2006 $2,173,321 2007 $2,240,537 2008 $2,154,363 2009 $2,267,750 2010 $2,350,000 Average…

A: PERCENTAGE CHANGE IN SALES Percentage change in sales is basically a sales percentage calculated, in…

Q: how to learn CAPM model?

A: In order to increase the return and reduce the risk, investors generally adding some securities to…

Q: What is the Baumol model, and how is it used?

A: The Baumol model, also known as the Baumol-Allais-Tobin (BAT) model, is a cash management model. In…

Q: What is full form of CIP? Explain about it.

A: Carriage and Insurance Paid to is the full form of CIP

Q: Explain an example of prepayments.

A: The outflow of money to reduce the liabilities occurred in the current accounting period refers to…

Q: Please explain the benefits of Hedging Instruments ??

A: A Hedging instrument is a financial product which helps to traders to reduce or limit the risk…