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- How is inflation considered in financial evaluations? Does it always have to be included in the financial analysis? Which of the following is not needed to compute the present value of an investment?a. The length of time between the investment and future receiptb. The interest ratec. The rate of inflationd. The amount of the receipTWhich of the following is a characteristic of a money market financial instrument? O A. High risk B. Low risk C. Low credit quality O D. Equity instrument
- Which of the following is the most appropriate way to display liabilities on the balance sheet? a. alphabetically by payee b. relative likelihood of payment c. nearness to maturity d. All of these answer choices are correct.What is the role of transferring credit risk? What is the various instruments used to transfer this risk?How can we determine the borrowing rate of return?
- which of the following risks is most closely associated with off balance sheet? trading risk liquidity risk credit risk interest rate riskEstablish a compensatory equilibrium. In financial statements, how are compensating balances reported?How is the impact of uncertainty reflected in a discounted cash flow (DCF) analysis?a) Debt/equity mixb) Discount ratec) Income tax rated) Interest coverage ratio
- Distinguish between the initial rate of interest and the expected yield on an ARM. What is the general relationship between the two? How do they generally reflect ARM terms?Outline and discuss the fundamental technique of valuation for both stocks and bonds. What role does the concept of annuity cash flow and perpetuity cash flow play in these valuations? Answer both please.1. Credit spreads least likely depend on which of the following: A. Market supply B. Market demand C. Financial markets D. Inflation
