Monday, April 30, 2012

Pure Time Value of Money

Pure Time Value of Money

Pure Time Value of Money

IB, SAPM Concept

The knol will have brief introduction to the concept, links to various knols on the concept, books on the concept and research papers on the concept. Knol is on open collaboration basis, so that visitors and authors can add their knols and research papers and update and enrich the knol on a continuous basis

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 Index of concepts
  1. Aa to Az
  2. Ba to Bz
  3. Ca to Cz
  4. Da to Dz  
  5. Ea to Ez
  6. Fa to Fz
  7. Ga to Gz
  8. Ha to Hz
  9. Ia to Iz
11. Ka to Kz
24. Xa to Xz

Subject

Chapter/Topic
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Concept Definition and Explanation

 
Rate of return on a security consists of three components.
 
1. Pure time value of money
2. Inflation premium
3. Risk premium
 
Pure time value of money is the interest rate demanded by an investor for postponing his consumption and making available capital to a borrrower.
 
If the lender anticipates inflation during the term of loan he demands an extra return to compensate for the loss in purchase power of money.
 
Risk premium arises due to uncertainty of interest and principal repayment.

 

 
References:
Reilly, Frank and Keith Brown, Investment Analysis and Portfolio Management, 7th Edition, Thomson-South Western, 2003
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Comments

google gold : the best money you can imagine

imagine A
A (B..) is our google gold unit .
you can buy it for 5 whuffies .
you only need to write your name behind it .
the first to do this, is the owner .
http://knol.google.com/k/kalle-schwarz/google-gold-auction/1m7f8ad2dgh39/349#
A-auction was closed today (2010-09-30) .
tomorrow B-auction will start .
request you all to become co-owners and contribute.
request all authors to add their names in the appropriate section.
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Kalle Schwarz - 01 Nov 2010

B-auction was closed on 2010-10-31 .
C-auction will start on 2010-11-01 .

Kalle Schwarz - 01 Nov 2010

Economic Activty - Business Cycles and Security Prices

Economic Activty - Business Cycles and Security Prices -

Economic Activty - Business Cycles and Security Prices -

IB, SAPM Concept

The knol will have brief introduction to the concept, links to various knols on the concept, books on the concept and research papers on the concept.

Authors

 Index of concepts
  1. Aa to Az
  2. Ba to Bz
  3. Ca to Cz
  4. Da to Dz  
  5. Ea to Ez
  6. Fa to Fz
  7. Ga to Gz
  8. Ha to Hz
  9. Ia to Iz
11. Ka to Kz
24. Xa to Xz

Subject

Chapter/Topic
_________________________________________________________________

Concept Definition and Explanation

 
Fluctuations in security market price levels are related to changes in the aggregate economy.
 
Business cycles keep occuring in aggregate economy.
 
Shishkin explains that the business cycle concept has been developed from the sequence of events discerned in the historical study of eocnomic activity. Periods business expansion appear to cumulate to peaks. As they cumulate, contrary forces tend ot gain strength, bringing about a reversal in business activity and the onset of a recession.  As a recession continue, forces for an expansion gradually emerge and they become dominant and a recovery begins.
 
National Bureau of Economic Research (NBER) has examined the relationship of alternative economic series to the behavior of aggregate economic activity. They identified a  strong relationship between stock market price level and aggregate economy fluctuations.
 
Stock price more consistently turn before the economy does. Thus stock market price level is classified as a leading indicator.
 
Why stock prices fluctuate in relation to  business cycles? As investors attempt to estimate future variables, expected recessions depress their estimates of corporate earnings and hence share prices.
 
Trading in stock market is popular using the relationship between business cycles and stock prices.
 
References:
Reilly, Frank and Keith Brown, Investment Analysis and Portfolio Management, 7th Edition, Thomson-South Western, 2003
Julius Shishkin, "Business Cycle INdicators: The Known and the Unknown," Review of the INternational Statistical Institute 31. No. 3, (1963), Pp.361-383
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Knols

XYZ
 
 

Related Knols

 
XYZ
______________________________________________________________________________

Books

 
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______________________________________________________________________________

Research Papers

 
XYZ
_______________________________________________________________________________

Concept Articles

 
XYZ
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Derivatives - Knol Book - Online Book

Derivatives - Knol Book

Derivatives - Knol Book

Introduction to Futures, Options and Swaps

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Collected Knols

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Short urls

http://knol.google.com/k/-/-/2utb2lsm2k7a/3652

Narayana Rao - 30 Dec 2010

Technical Analysis - Lectures and Explanation - YouTube Videos

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