Rate of return

is a great way to grow your money. Some investments have very low risk but the return on investment may be low as well. Then there are high risk investments that give you high returns. Your risk tolerance will help you determine how you will invest your money. Two markets that can bring in some good returns are stocks and bonds. Both of these assets have different feature which will determine how you will see your returns. Bonds A bond is a contract issued by a corporation or government…

research on interest rates and their inverse relationship to bond prices. At first glance, the inverse relationship between interest rates and bond prices seems somewhat illogical, but upon closer examination, it makes sense. An easy way to grasp why bond prices move opposite to interest rates is to consider zero-coupon bonds, which don't pay coupons but derive their value from the difference between the purchase price and the par value paid at maturity. ("Why do interest rates tend to have an…

between returns and of the portfolio and the market portfolio. An absolutely diversified portfolio will correlate accurately with completely diversified market portfolio since only has a systematic risk. Portfolio performance measures are the most important aspects of the investment process. Performance measures enable the availability of information necessary for investors to make a decision on how effectively the money has been invested or should be invested. Evaluation of risk-adjusted…

Profit rate for a hotel is its net present value divided by its cost. Company Background Marriott Corporation began in 1927 with J. Willard Marriott's root beer stand. Over the next 60 years, the business grew into one of the leading lodging and food service companies in the United States. Marriott's 1987 profits were $223 million on sales of $6.5 billion. See Exhibit 1 for a summary of Marriott's financial history. Marriott had three major lines of business: lodging, contract services, and…

Liability Management A credit side of a US bank’s balance sheet typically included floating-rate liabilities and long-term fixed-rate liabilities, whereas debit side consisted of floating-rate assets and long-term fixed-rate assets. Generally speaking, asset and liability management required the banks to match the economic characteristics of its cash in and out and the strategic decisions relative to interest rate exposure required banks to match their assets to liabilities effectively. If the…

project. Net present value is calculated by dividing the expected income of a project in each future year by a term equal to one plus a discount rate raised to a power equal to the year. The totals for each year then are added together, and the initial cost of the project is subtracted from that sum to arrive at the net present value. The discount rate represents the time value of money: the amount that could be made by committing the money to other opportunities. Net present value is based on…

Social issues are becoming more and more common. The new initiative for New Zealand to use private investors to fund social issues is still not proven to be successful. Many argue that the Government is jumping into a venture they really have no knowledge on, due to lack in number of countries using Social bonds. However the massive potential for improvement in social issues is undeniable using this method. Social bonds seek to help many social issues, with the first in New Zealand looking to…

Portfolio rebalancing model is powerful to explain the exchange rate and equity returns by Hau (2004). Based on the portfolio balance approach, M.Gelman et al. (2015) found a new approach to estimate the correlation between foreign exchange rates, asset prices and capital flows. They showed a long-run equilibrium between REFER and NFH. According to this new equilibrium, there is an equilibrium relationship between the stock of assets held by international investors and the asset prices. The…

FINANCIAL FEASIBILITY MAJOR ASSUMPTIONS 1. The initial capital of ChixChops is five hundred thousand pesos (P 500,000). 2. Salaries expense of the employees is expected to increase 2 % per annum. This is based on the inflation rate given by Bangko Sentral ng Pilipinas for the year 2016 – 2020. 3. Clothing expenses of employees are expected to increase every 2 years by 2%. 4. Utilities expense is expected to increase by 2% annually. 5. Advertising expense is expected to increase 2% annually. 6.…

necessary to analyze net present value and internal rate of return to gauge return on investment. DT LLC has decided to use three depreciation methods – including straight-line, sum-of-the-year’s digits, and MACRS depreciation – to determine the profitability of XYZ’s investment. DT LLC’s accounting department believes analyzing the computer system investment through three separate depreciation methods would give a comprehensive overview of the return on this investment. DT LLC used the…