2400 3500 6300 0 0 0 9800 0 0 13432 0 0 0 0

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Soomro made an investment that will pay RS 2400

the first year, RS 3500 the second year, RS 6300 the
third year, RS 9800 Sixth year and RS 13432 10th year.
If the compounding rate is ten percent, what is value
of this cash flow stream end of 15th year?
 Financial Markets
• Physical Asset Markets vs Financial Asset Markets

• Spot Markets vs Futures Markets

• Money Markets vs Capital Markets

• Primary Markets vs Secondary Markets

• Local, Regional, National and world Markets

 Other types (features) of bonds

• Convertible bond – may be exchanged for common

stock of the firm, at the holder’s option.
• Put-able bond – allows holder to sell the bond back to
the company prior to maturity.
• Income bond – pays interest only when interest is
earned by the firm.
• Indexed bond – interest rate paid is based upon the
rate of inflation.
 Callable Bond
• A bond that can be redeemed by the issuer
prior to its maturity.
• Usually a premium is paid to the bond owner
when the bond is called.
– The main cause of a call is a decline in interest
rates.