Great question!
Fiat money deries it's value from law or regulation. However representative money derives its value either from a claim on a commodity (gold for example).
However sometimes representative money means it has value higher than what it is made of, ie if you melt it down it is worth less than before it is melted down. In this sense fiat money is a type of representative money
Answer:
All cash flows other than the initial investment occur at the end of periods.
All cash flows generated by the investment project are immediately reinvested at a rate of return equal to the discount rate.
Explanation:
Net present value method: In this method, the initial investment is subtracted from the discounted present value cash inflows. If the amount comes in positive than the project is beneficial for the company otherwise not.
In the net present value, the yearly cash flows other than the initial investment is occur at the end of the period as all the yearly cash flows are discounted at the present value factor.
And, the discount rate is equal to the rate of return
So, these two statements are correct.
Answer:
II and III only
Explanation:
Since the Zero dividend is not possible in most of the scenarios.
The dividend growth model can be used to value the stock of firms that pay Annual dividend with a constant increasing rate of growth and the Annual dividend with a constant decreasing rate of growth.
Answer: B) GNMAs are considered to be the riskiest of the agency issues
Explanation:
The Government National Mortgage Association (GNMA) or <em>Ginnie Mae</em> as they are popularly known, are a Federal agency that guarantee the payment of interest and principal on securities by lenders that are approved by the Agency.
As a result, these securities are backed, like Treasury Bills, by the full faith and credit of the United States Government which means that they are the safest of Agency issues.
