When you go to a bank enquiring about the deposit rates, the rates specified by the bank can be expressed in two ways: nominal interest rate, and the effective annual yield. The difference between the two is that the nominal rate does not take the compounding into consideration, while the effective annual yields take the
When you invest a dollar today, you expect to receive more than a dollar after a period of time. The additional amount earned on your investment is the time value of money and is calculated based on the interest rate. There are primarily two ways of calculating interest: 1. Discrete (Includes simple and compound interest)
This is the introduction section for PRM Exam I. It presents the fundamental concept that money has a time value that results from investment opportunities. It covers basic measures of interest rates, the value of time and compounding methods. These foundational concepts have relevance for the valuation of all financial assets. Learning Outcome Statements: Differentiate
This post is for students who are preparing for or planning to write the PRM exam. Professional Risk Manger (PRM) Exam has become quite popular among the risk professionals and students and competes head-on with the respectable Financial Risk Manager (FRM) Exam from GARP. Even though both the exams certify you as risk managers, the
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