The time value of money.

This forum is to discuss the book "the concepts and practice of mathematical finance" by Mark Joshi.

The time value of money.

Postby harrychamp » Sun Dec 16, 2012 12:42 pm

Hi,

On page 24 (2nd ed of Concepts), second paragraph, it is said "it is generally easier, though sometimes misleading, to think in terms of interest rates".

I was wondering what is so misleading about discounting/accumulating cash flows to different time periods? How is this not acceptable?
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Re: The time value of money.

Postby mj » Mon Dec 17, 2012 5:32 am

i think i was just trying to point out that you have to be very careful about what a rate actually applies to.
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