FM Exam

Learning objectives listed in the syllabus.

71 cards   |   Total Attempts: 189
  

Cards In This Set

Front Back
Simple Interest
Answer
Compound Interest
Answer
Accumulation Function
The accumulated value of the fund at time t of an initial investment. The accumulated value of the fund at time t of an initial investment.
Sum of a Geometric Progession
Answer
Effective Rate of Interest
Regular i. Tells us how fast a fund is growing based on the amount in the fund at the beginning of the year. Regular i. Tells us how fast a fund is growing based on the amount in the fund at the beginning of the year.
Effective Rate of Discount
Regular d. Tells us how fast a fund is growing based on the amount in the fund at the end of the year. Regular d. Tells us how fast a fund is growing based on the amount in the fund at the end of the year.
Present Value
Amount at time 0. How much should we invest today in order to have a given amount at the end of t years? Amount at time 0. How much should we invest today in order to have a given amount at the end of t years?
Discount to Interest Relationship
Answer Answer
Nominal Rate of Interest
Cannot be directly used to calculate. "compounded" & "convertible". First we convert according to the number of compounding periods. Cannot be directly used to calculate. "compounded" & "convertible". First we convert according to the number of compounding periods.
Nominal Rate of Discount
Cannot be directly used to calculate, we need to convert to an effective rate. Cannot be directly used to calculate, we need to convert to an effective rate.
Force of Interest
Rate of growth at any time**U-substitution**variable means integrate from a to b**Rate of growth at any time**U-substitution**variable means integrate from a to b**= =Rate of growth at any time**U-substitution**variable means integrate from a to b**= Rate of growth at any time**U-substitution**variable means integrate from a to b**=
Constant Force of Interest
....
Time Value of Money
Always use a common comparison date
Equation of Value
?
Inflation
....