7.1 The relationship between an asset’s value & its price 7.2 Value maximization & financial decisions 7.3 The law of one price & arbitrage 7.4 Arbitrage & the law of one price 7.5 Interest rates & the law of one price 7.6 Exchange rates & triangular arbitrage 7.7 Valuation using comparables 7.8 Valuation Models 7.9 Accounting measures of value 7.10 How information is reflected in security prices 7.11 The efficient markets hypothesis
• National income accounts – measures of national income – measures of value of production – measures of value of expenditure • National saving, investment, and the current account • Balance of payments accounts
1.Identify accounting topics where the time value of money is relevant. 2.Distinguish between simple and compound interest. 3.Use appropriate compound interest tables. 4.Identify variables fundamental to solving interest problems. 5.Solve future and present value of 1 problems. 6.Solve future value of ordinary and annuity due problems. 7.Solve present value of ordinary and annuity due problems. 8.Solve present value problems related to deferred annuities and bonds. 9.Apply expected cash flows to present value measurement
