Chapter13-Valuation of investments

Question 1

Framework

Answer 1

1 Methods of valuing individual investments (SHAM FADS)
2 Advantages and disadvantages of market value
3 Advantage and disadvantages of discounted cashflow
4 Stochastic modelling method
5 Arbitrage value and fair value
6 Bond valuation methods
7 Equity valuation methods
8 Simplified discounted dividend model for valuing equities
9 Measurable key factor approach to valuing equities
10 Discount rate for property valuation
11 Swap valuation methods
12 Considerations when valuing a portfolio of assets
13 Methods of valuing assets and liabilities consistently
14 Volatility of asset values as a problem

Question 2

Methods of valuing individual investments

Answer 2

Smoothed market value

Historic book value

Adjusted book value

Market value

Fair value

Arbitrage value

Discounted cashflow

Stochastic modelling