What is premium on forward rate?

Q: What is market interest rate?

A: The interest rate in which borrowers and lenders borrow and lend money to each other is called…

Q: What are the two types of discounts?

A:

Q: Define the term recovery allowance percentages?

A: Tax based depreciation rates are provided by the IRS and are called MACRS which is the modified…

Q: Why does Sales discounts are variable consideration?

A: Variable considerations: Variable consideration refers to the amount that the corporation is…

Q: Compare the book value with the market price?

A: Book value is the amount of acquisition cost of asset, less accumulated depreciation as on a…

Q: What is marginal rate (for debt)?

A: Marginal rate of debt is the rate of interest expected by the investors on their debt instruments…

Q: How do you calculate inflation premium

A: Inflation refers to the sustained increase in the general level of prices of goods and services in…

Q: Which of the following creates variable consideration? Discounts Allowances Rebates All of these…

A: Variable consideration includes the following: Rebate Discount Credit Allowances Penalties Sales…

Q: What is market/book (M/B) ratio?

A: Introduction: Market value is nothing but the value derived when the stock price is multiplied by…

Q: What is interest coverage ratio?

A: The interest coverage ratio is the ratio which shows the ability of the company to pay the interest…

Q: Define the term s price-earnings ratio?

A: Financial Ratios: Financial ratio analysis expresses the relationships between different items…

Q: What is WACC and why would that be used as the discount rate?

A: WACC stands for Weighted Average Cost of Capital. It is a calculation of a firm's cost of capital in…

Q: Define Purchase discounts.

A: Purchase discounts: The sellers offer a reduction in purchase price on initial purchases, to…

Q: What is interest rate?

A: Answer: At a particular situation, an interest rate determines how much money a borrower promises to…

Q: What is the Effect of Loan-to-Value Ratio on Loan Cost?

A: LTV ratio tells about the maximum loan approved in terms of the value of the collateral given.

Q: Describe the difference between a trade discount and a cash discount.

A: Discounts are essential in commercial transactions because they affect buyers' decisions and help…

Q: What is the concept of present value? What is discounting?

A: Present value means value of future cash flows in todays terms.

Q: Explain the difference between a trade discount and a cash discount.

A: Discount is the deduction from the cost of product or service that a seller offers to the buyer…

Q: What is the lnventory·turnover ratio?

A: Inventory turnover ratio: Inventory turnover ratio indicates how many times a corporation has sold…

Q: What is the meaning of Installment Sales?

A: Installment sale: It is one of a few potential income acknowledgments approaches under the Generally…

Q: What is the discounted-payback method?

A: Payback period states the number of years that is taken by the project to recover the investment of…

Q: What is interest rate parity?

A: Interest rate parity: Interest rate parity is a theory concerning the association among spot…

Q: What is going interest rate?

A: An interest rate is the rate which is applicable on loan and the borrower has to pay the interest…

Q: Compare standard quantity discounts to cumulative quantity discounts.

A: Cumulative Quantities Discount (CQD) is a system intended to recompense consumers after a definite…

Q: What is liquidity premium (LP)?

A: Answer: Interest rate theory on liquidity premium is a significant concept in bond investment. It…

Exchange Rate Risk

It is the possibility that the value of a currency will fluctuate in the future. In the wake of globalization, business establishments have increasingly ventured into international markets. The volume of international trade has prospered excellently in the near past and is expected to be more affluent in the future. The use of exchange-traded derivative financial instruments has been multi-folded to provide for the requirements of various MNCs and offshore potential investors. Most banks and financial institutions have helped integrate the global economies. Our Government has introduced some bold and extreme measures to fulfil the purpose behind the fiscal, industrial, and monetary policies. The enactment of GST is a huge step towards streamlining the taxation system of the country. Owing to Covid-19, this aspect of corporate risk management has become critical.