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Discount Rate—Explanation, Definition and Examples

Valutico

In this article, we’ll cover the basics of what a discount rate is and where it’s used. More importantly, we’ll dig deeper into how discount rates can influence investment choices and how they’re used to figure out a company’s worth. What is a discount rate?

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Convertible Arbitrage Hedge Funds: The Perfect Combination of Investment Banking and Sales & Trading?

Brian DeChesare

Convertible Arbitrage Definition: Convertible arbitrage is a relative value strategy in which a hedge fund profits based on the pricing discrepancy between a company’s convertible bonds and its underlying stock; the fund exploits changes in volatility, credit quality, and interest rates to make money while minimizing overall market risk.

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Beta Explained: What It Is and How to Calculate It

Valutico

In the world of finance and investing, the concept of beta plays a vital role in assessing an investment’s risk and volatility. Whether you’re a seasoned investor or new to the market, understanding beta can empower you to make informed decisions. Different indices may yield different beta values for the same asset.

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Discounted-Cash-Flow-Analysis: Your Complete Guide with Examples

Valutico

If you want to read to a step-by-step example of a DCF, skip to the end of the article here. How to Determine the Correct Discount Rate to use? In this article, we have referred to the discount rate to be used to discount the future cash flows as the Market Rate (r) or generally as the discount rate (d). .