This Case is about Finance

Publication Date: 10/28/2005

Mortgages are among the most sophisticated products. It is because valuation of these tools calls for an understanding of particular comparatively financial concepts that are vexing. These are: (a) The present value theory,(b) Period versus amortization,(c) Said return compounding frequency of payment, and (d) Mortgagee’s essential return (otherwise called the opportunity cost of capital). This note discusses these theories.

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