Question 1: If as an investor, you had a choice of daily, monthly, or quarterly compounding which would you choose and why?
Question 2: List five different applications of Time Value of money?
Question 3: How do you value (price) bonds? How is the valuation of any financial asset related to future cash flows/
Question 4: If inflationary expectations increase, what is likely to happen to the yield to maturity on bonds in the market place? What is also likely to happen to the price of bonds?
Question 5: Why do we use the overall cost of capital for investment decisions even when only one source of capital will be used?(e.g., debt)?
Question 6: Explain the traditional U - Shaped approach to the cost of capital?