|Author||Topic: Time value of money|
|Ok, here's a real easy one for somebody even though it's driving me up a wall. Volume 1, p 209, Q13. A TVM question and I understand the math, but the answer seems as though it should discount the answer back one more year for a more accurate comparison. The annuity option begins in one year so shouldn't it be discounted back one more year in order to put it in sync with the immediate option? Otherwise, there is an extra year of growth|
|Max, could you post the question itself? Some odf us use fifferent providers for notes, and not the CFA institute books.
But if the annuity begins in one year (BGN of year 2), it's the same as begins at the end of this year (END of year 1).
I am sure though it's what what you're asking...