Why an investment near its maturity have insignificant risk

Assignment Help Accounting Basics
Reference no: EM13125910

The value of an investment can be described as equal to the present value of its future cash flows, discounted at an appropriate interest rate. Why does an investment near its maturity have insignificant risk of change in value because of changes in interest rate?

Reference no: EM13125910

Questions Cloud

Preparing a multiple-step income statement : Prepare a multiple-step income statement and a retained earnings statement. Dickinson Company decided to discontinue its entire wholesale operations and to retain its manufacturing operations.
Illustrate what is differential cost between two alternative : Which costs are relevant and which are not relevant in the choice between these two alternatives? Illustrate what is the differential cost between the two alternatives?
Find probability that seven heads showing up in coin : Toss ten unbiased coins once at the same time, what is the probability that seven heads showing up? Use Binomial Distribution to calculate the probability.
Taxation and price controls : Suppose the government is considering levying a tax in one or more of the markets described in the table. Which of the markets will allow the government to minimize the deadweight losses from the tax?
Why an investment near its maturity have insignificant risk : The value of an investment can be described as equal to the present value of its future cash flows, discounted at an appropriate interest rate. Why does an investment near its maturity have insignificant risk of change in value because of changes ..
Combinations-selecting members of committee : A club has 28 members, and 6 members must be selected to make a committee. Of the 28 members, 15 are men and the rest are women. How many ways can the 6 member committee can be selected if there are to be 4 men and 2 women on the committee?
Define survival of fish in freezing water : Survival of Fish in Freezing Water, Fish produce glycerol to survive the freezing waters of the Arctic. Determine the degree to which the freezing point of blood and other biological fluids is lowered with the help of glycerol.
How many seconds are required to produce chromium metal : How many seconds are required to produce 4.94 mg of chromium metal from an acidic solution of potassium dichromate, using a current of 0.234 A?
To eliminate experimental bias based : In explaining the study to the physicians and nurses who will participate , what steps should the researcher take to eliminate experimental bias based on both experimenter expectations and participant expectations.?

Reviews

Write a Review

Accounting Basics Questions & Answers

  Purposes of analytical procedures

There are four important purposes of analytical procedures. Identify one of these four purposes and give a specific example of an analytical procedure that an auditor might perform.

  Compute the taxable income and tax liability for james

Anthony and Latrisha are married and have two sons, James, age 25 and Jonas, age 13. Both sons are properly claimed as dependents. Anthony and Latrisha's marginal tax rate is 25% in the current year and they file a joint return. Both James and Jon..

  Discuss relevance of budgeting

Discuss the relevance of budgeting as it relates to the accounting profession in general. Relate lessons learned from a self-selected reading or from something you learned while working on your accounting profession in general.

  Determining role of cost manager

What does the cost manager do? What information does the cost manager get and how does he use it? What decision does the cot manager make about production and how does it affect shareholders?

  Cash basis-accrual basis of accounting

What is the difference between the cash basis of accounting and the accrual basis of accounting? Which one would you select for a company that has inventory and why?

  Should the company accept the special order

The company is currently producing 15,000 units per month. A potential customer has contacted the firm and offered to purchase 5,000 units this month only at a price of $4.25 per unit. There would be no variable marketing costs incurred on the con..

  Determine harriets vesting years

Evaluate her entry date into the plan and determine Harriet's vesting years as of 31 st December, 2000

  Current year tax return

Kendra is a self-employed taxpayer working exclusively from her home office. Before the home office deduction, Kendra has $5,000 of net income. Her allocable home expenses are $10,000 in total. How are the home office expenses treated on her curre..

  Estimating the stocks price per share

The company has 10 million shares of stock outstanding. What is the best estimate of the stock's price per share?

  Prepare journal entries that fortune-time recorded

Listed below are transactions dealing with various stock benefit plans of Fortune-Time Corporation during the period 2009-2011. The market price of the stock is $45 at January 1, 2009. Prepare the Journal entries that Fortune-Time recorded for each..

  Find the cumulative effect of accounting change

The change will result in a $1,800,000 increase in the start inventory at January 1, 2013. Consider a 40% income tax rate. Find the cumulative effect of this accounting change on beginning retained earnings

  Problem regarding vertical analysis

Vertical analysis is used to compare a balance sheet number from a previous period with an income statement number for the current period.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd