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11 Cards in this Set
- Front
- Back
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is the possibility that actual outcomes will vary from what was expected when the asset was purchased.
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risk
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they are widely used by finance professionals to calculate mortgage payments, determine values for stocks and bonds, calculate insurance premiums and decide whether potential capital expeditures are profitable enough to commit investment capital.
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time value money
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calculation of present values
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discounting
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the difference between the PV of cash flows and the PV of cash out flows.
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npv
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a one time receipt or expenditure occuring in a given period
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lump sum
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a fixed amount of money paid or received at the end of every period
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ordinary annuity
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the return the investor is forgoing on an alternative investment of equal risk in order to invest in the current opportunity
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opportunity cost
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the rate of interest that equates the present value of the cash inflows to the present value of the cash outflows
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internal rate of return
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the growth in the invested dollars of an investment. usually stated as a percentage growth or return.
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investment yield
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the lowest risk real estate investments available
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investment grade properties
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calculation of future values
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compounding
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