PDA

View Full Version : SN 109 Transfer Pricing


Size17
04-03-2009, 12:32 PM
In example 2 on page 11, the CD YTM is 6.06% for the benchmark portfolio...I can't see where this comes from, is it just given, or am I missing something?

PAK
04-03-2009, 03:25 PM
In example 2 on page 11, the CD YTM is 6.06% for the benchmark portfolio...I can't see where this comes from, is it just given, or am I missing something?

Look at Example 2 on p.11. You invest $5000 at time 0 and you will get the cash flows each year (e.g. 1055 at year 1, 1118.31 at year 2.....). Take the IRR and you will get 6.06% (-5000+1055/(1+IRR)+1118.31/(1+IRR)^2+...+1354.08/(1+IRR)^5)

Size17
04-03-2009, 03:52 PM
Look at Example 2 on p.11. You invest $5000 at time 0 and you will get the cash flows each year (e.g. 1055 at year 1, 1118.31 at year 2.....). Take the IRR and you will get 6.06% (-5000+1055/(1+IRR)+1118.31/(1+IRR)^2+...+1354.08/(1+IRR)^5)
thanks...i guessed it was IRR, but i was using the 5305 as initial outlay