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  2. Capital and Interest - Wikipedia

    en.wikipedia.org/wiki/Capital_and_Interest

    Capital and Interest (German: Kapital und Kapitalzins) is a three-volume work on finance published by Austrian economist Eugen Böhm von Bawerk (1851–1914). The first two volumes were published in the 1880s when he was teaching at the University of Innsbruck .

  3. Impossible trinity - Wikipedia

    en.wikipedia.org/wiki/Impossible_trinity

    In terms of the diagram above (Oxelheim, 1990), the options are: Option (a): A stable exchange rate and free capital flows (but not an independent monetary policy because setting a domestic interest rate that is different from the world interest rate would undermine a stable exchange rate due to appreciation or depreciation pressure on the domestic currency).

  4. Asset and liability management - Wikipedia

    en.wikipedia.org/wiki/Asset_and_liability_management

    Its scope, though, includes the allocation and management of assets, equity, interest rate and credit risk management including risk overlays, and the calibration of company-wide tools within these risk frameworks for optimisation and management in the local regulatory and capital environment. Often an ALM approach passively matches assets ...

  5. Financial risk management - Wikipedia

    en.wikipedia.org/wiki/Financial_risk_management

    The regulatory capital quantum is calculated via specified formulae: risk weighting the exposures per highly standardized asset-categorizations, applying the aside frameworks, and the resultant capital — at least 12.9% [29] of these Risk-weighted assets (RWA) — must then be held in specific "tiers" and is measured correspondingly via the ...

  6. Marginal efficiency of capital - Wikipedia

    en.wikipedia.org/wiki/Marginal_efficiency_of_capital

    The MEC and capital outlays are the elements that a firm takes into account when deciding about an investment project. The MEC needs to be higher than the rate of interest, r, for investment to take place. This is because the present value PV of future returns to capital needs to be higher than the cost of capital, C k. These variables can be ...

  7. Cost of capital - Wikipedia

    en.wikipedia.org/wiki/Cost_of_capital

    The total capital for a firm is the value of its equity (for a firm without outstanding warrants and options, this is the same as the company's market capitalization) plus the cost of its debt (the cost of debt should be continually updated as the cost of debt changes as a result of interest rate changes).

  8. Time value of money - Wikipedia

    en.wikipedia.org/wiki/Time_value_of_money

    Time value of money problems involve the net value of cash flows at different points in time. In a typical case, the variables might be: a balance (the real or nominal value of a debt or a financial asset in terms of monetary units), a periodic rate of interest, the number of periods, and a series of cash flows. (In the case of a debt, cas

  9. Binomial options pricing model - Wikipedia

    en.wikipedia.org/wiki/Binomial_options_pricing_model

    In finance, the binomial options pricing model (BOPM) provides a generalizable numerical method for the valuation of options.Essentially, the model uses a "discrete-time" (lattice based) model of the varying price over time of the underlying financial instrument, addressing cases where the closed-form Black–Scholes formula is wanting, which in general does not exist for the BOPM.