Learning Module 2 of Quantitative Methods 6–9% of the exam
Time Value of Money in Finance
3 lessons. About 0 minutes in cram mode, 0 minutes in full.
Lessons for this module are being written. The outcomes and lesson plan below are final.
Lessons
- 1 Time Value of Money in Fixed Income and Equity
Coming soon
- 2 Implied Return and Growth
Coming soon
- 3 Cash Flow Additivity
Coming soon
What the exam expects you to do
- Calculate and interpret the present value (PV) of fixed-income and equity instruments based on expected future cash flows.
- Calculate and interpret the implied return of fixed-income instruments and required return and implied growth of equity instruments given the present value (PV) and cash flows.
- Explain the cash flow additivity principle, its importance for the no-arbitrage condition, and its use in calculating implied forward interest rates, forward exchange rates, and option values.