Professional Documents
Culture Documents
Financial Decision
Making and the Law
of One Price
Chapter Outline
3.1 Valuing Decisions
3.2 Interest Rates and the Time Value of
Money
3.3 Present Value and the NPV Decision Rule
3.4 Arbitrage and the Law of One Price
3.5 No-Arbitrage and Security Prices
Marketing
Economics
Organizational Behavior
Strategy
Operations
Example 3.2
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Cost = ($100,000 today)(1.0 + 7%)
= $107,000 in one year
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Example 3.4
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max NPV
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Normal Market
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Identifying Arbitrage
Opportunities with Securities
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Example 3.6
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Example 3.7
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Chapter 3
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Appendix
Learning Objectives
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Chapter Quiz
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What is Arbitrage?
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Questions
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