What is premium on forward rate?

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: Define Times interest earned ratio.

A: Accounting Ratios: A ratio is a number expressed in terms of anther. Ratios are used 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: What is the Times-interest·earned ratio?

A: It is important to analyze whether a company has ability to pay off its debts. Means, it is…

Q: What is the difference between spot rates andforward rates? When is the forward rate at a premium to…

A: Spot rates are the rates that prevail in the cash market or the rates that are applicable today.…

Q: What is the Relationship between the Incremental Cost and the Loan-to-Value Ratio?

A: The question is based on the concept loan to value ratio and its relationship with incremental cost.

Q: What is interest rate?

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

Q: Define Trade discounts.

A: Business:   It refers to a commercial activity involving buying and selling of a product or a…

Q: What is liquidity premium (LP)?

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

Q: What does the annuity factor indicate?

A: Annuity factor It indicates the discounted factor’s sum for all the n maturities when all n…

Q: Which different terms are used to refer to rate of return?

A: Rate of return is the return that is expected by the investors from the investment made. It is…

Q: Define Interest cost.

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: When is the Times-Interest-Earned Ratio?

A: The TIE is a calculation of a firm's ability to reach its debt liability based on its current…

Q: What is the accounting rate of return?

A:

Q: What is net interest margin(NİM)?

A: There are various profitability ratios

Q: How do I calculae the times interest earned ratio?

A: Calculate the times interest earned ratio as follows: Times interest earned ratio = EBIT / Interest…

Q: What is the formulae used to find markup price?

A: Markup price is the price that the player comes up with after adding the mark up to the cost price…

Q: What is the Effective Rate per Payment Period?

A: Answer: The effective rate is nothing but the yearly rate under average compounding, will have…

Q: explain the application of annuities with discount rates (usinf formulas)

A: Annuities are a series of equal payments made at regular intervals. The concept of discounting…

Q: What is the difference between the regularand discounted payback periods?

A: The Regular Payback period is one of the capital budgeting techniques. It refers to the time period…

Q: why does an increase in the discount rate resuce the present value?

A: This relates to the concept of time value of money. We do discounting when present value needs to be…

Q: takaful premiums are?

A: Takaful insurance is an Islamic insurance in which Group members contribute money to mitigate the…

Q: What is the Cumulative interest payment?

A: Cumulative interest payment is the sum of all previous interest payments that are made for an…

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.