Week 2 Journal

Present and Future Values, and Expected Returns

We examined two important topics in finance this week: (a) present and future values and (b) security valuation.

Critically reflect on the importance of present and future values.  What factors must be considered when calculating present and future values? What other qualitative factors play into present and future value decisions? Perhaps you have opportunities in your professional life to use present and future values. What are some real or potential applications of these concepts?

We also looked at expected returns. Why do bond values go down when interest rates go up? Is this true in the opposite direction?