- This topic has 2 replies, 2 voices, and was last updated 4 years ago by
.
Viewing 3 posts - 1 through 3 (of 3 total)
- Posts
This is one of two assumption of discounting factor until examiner specifies.
“All cash flows occur at the start or end of a year.
Although in practice many cash flows accrue throughout the year, for discounting purposes they are all treated as occurring at the start or end of a year. Note that if today (T0) is 01/01/20X0, then 01/01/20X2 is (T1).”Can you explain this assumption? And what is drawback if we do not assume this.
Discounting is not examinable in Paper FA and nothing in your question is relevant for this exam.
Viewing 3 posts - 1 through 3 (of 3 total)
- The topic ‘Discounting’ is closed to new replies.