Description
Discussion - 1
Assume that you have a short investment horizon (less than 1 year). You are considering two investments: a 1-year Treasury security and a 20-year Treasure security. Which of the two investments would you view as riskier. Explain your answer.
Discussion-2
Banks and other lenders are required to disclose a rate called the APR. What is that rate? Why did Congress require it to be disclosed? Is it the same as the effective annual rate? If you were comparing the costs of loans from different lenders, could you use their APRs to determine the loan with the lowest effective rate? Explain your answer.
Explanation & Answer
Attached.
Managerial Finance Discussions-2 - Outline
Thesis statement: Investment decisions requires understanding of the risks inherent as well as
the cost of borrowing.
I.
Discussion one
A. Security investment for one year is riskier
II.
Discussion two
A. Definition of APR
B. Difference between the APR and EAR
C. Why the APR rate is disclosed
D. Decision making basing on the APR and the EAR
Running head: MANAGERIAL FINANCE DISCUSSIONS
Managerial Finance Discussions-2
Name
Institution
1
MANAGERIAL FINANCE DISCUSSIONS
2
Managerial Finance Discussions-2
Investment can be short term or long term depending on the risk appetite of the
investor. An investment in security within a time frame of one year, in this case, can be said
to be ...
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