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Flashcards in Time Value of Money Deck (4)
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Nominal Risk Free Rate

The risk free rate not adjusted for inflation

Real Risk Free Rate + Expected Inflation Rate


Default Risk

The risk that a borrower will not make a promised payment in a timely manner


Liquidity Risk

The risk that you will receive less than fair value for an investment if it must be sold for cash quickly


Maturity risk

Longer maturity investments have more maturity risk then shorter term investments and require a maturity risk premium