COMMERCE 2FA3 Study Guide - Final Guide: Apidae, Risk Premium, Capital Asset Pricing Model

• School: McMaster University
• Department: Commerce
• Course: COMMERCE 2FA3
• Professor: Richard Deaves

Document Summary

Fisher equation : r=r + cf per share cashflow. Second dividend yield r- nominal interest rate r* - real interest rate. Fvif (k; t) future value interest factor. Pvif (k; t) present value interest factor = Fv of annuities : k (stated ) m. = k k(stated) stated interest rate based on compounding more than one year. V 0=e rt=exp ( t kc) t years not periods. [ 1+ k ( x month) ] x=[1+ k ( y mont. K c=ln (1+k ) less than a year to an annual basis: where ear is the effective annual rate. + cf (1+ k )2 + + cf (1+k ) Annuity increase with n but decrease with k. V 0=cf x-month to y-month span: Chapter 3 return and risk y x) (1+ k (x month) V 0= cf k g k discount rate g growth rate cf cash flow n number of periods annui.