金融学基础|FINM1001 Foundations of Finance代写

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This course is designed to familiarise students with the components of the financial system as well as to introduce them to the three basic ideas underpinning finance, namely the time value of money, diversification and arbitrage. In doing so, the course provides students with introductory exposure to financial transactions, institutions and markets including money markets, stock markets, foreign exchange and derivative markets and the instruments traded therein. It also provides students with a solid foundation for later studies in finance.

If you wish to provide 520,000 for your newborn’s University education, how much should you imvest now, given the interest rate that will accrue on the investment is $10 \%$ p.a compounded monthly?

In order to determine how much you should invest now, calculate the present value of $\$ 20,000received 18 years from now, bearing in mind that interest is compounded monthly. \begin{aligned} P V &=\frac{\ 20,000}{\left(1+\frac{0.10}{12}\right)^{12_{x} 13}} \ &=\ 3,330.73 \end{aligned} FINM1001 COURSE NOTES ： A company needs\$10,000$ in 5 years to replace a piece of equipment. How much must be invested each year at $8 \%$ p.a compounded semi-annualy in order to provide for this replacement?

To determine the amount the company must invest annually, simply use the future value of an annuity formula, bearing in mind that the interest rate is compounded semi-annually. Therefore, as investments will be made on an annual basis, we must calculate an annual effective interest rate to use in the annuity calculation.
\begin{aligned} r &=\left(1+\frac{0.08}{2}\right)^{2}-1 \ &=0.0816 \ &=8.16 \% \end{aligned}
\begin{aligned} \ 10,000 &=F\left[\frac{(1.0816)^{3}-1}{0.0816}\right] \ F &=\frac{\ 10,000}{\left[\frac{(1.0816)^{5}-1}{0.0816}\right]} \ &=\ 1,699.14 \end{aligned}