Compounding factor and Developed market: Difference between pages

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''Financial maths.''
''Market classification.''


(CF).  
(DM).


A compounding factor is a number greater than one, that we multiply a present value by, to work out its [[Future Value]] (FV) as:
A developed market is one which has reached the most advanced levels of development in its economy and capital markets.


FV = CF x present value.


Markets (in order of economic development) are often classified as:


The Compounding Factor is calculated from the periodic yield as:
::Developed;
::Emerging;
::Frontier;
::Least Developing.


CF = (1 + periodic yield)<sup>n</sup>


Where:
Different organisations produce slightly different lists of countries within each of these categories.


n = number of periods
Examples of developed markets in MSCI's classification include - in alphabetical order - Australia, Austria, Belgium, Canada and Denmark.




<span style="color:#4B0082">'''Example'''</span>
==See also==
*[[Australia]]
*[[Canada]]
*[[Capital market]]
*[[Developing country]]
*[[Economy]]
*[[Emerging currency]]
*[[Emerging market]]
*[[EMTA]]
* [[Frontier market]]
*[[International Bank for Reconstruction and Development]]
*[[Least developed countries]
* [[Market]]
*[[United Nations Conference on Trade and Development]]


Annual effective yield (r) = 6%.


Number of years in the total period (n) = 2.  
==External link==
*[https://www.msci.com/our-solutions/indexes/market-classification Market classifications - MSCI]


Then:
[[Category:The_business_context]]
 
[[Category:Financial_products_and_markets]]
Compounding Factor = (1 + r)<sup>n</sup>
 
= 1.06<sup>2</sup>
 
= 1.1236.
 
 
== See also ==
* [[Compounding effect]]
* [[Discount factor]]
* [[Future value]]
* [[Present value]]
 
[[Category:Financial_management]]
[[Category:Corporate_finance]]
[[Category:Manage_risks]]

Revision as of 12:54, 20 June 2022

Market classification.

(DM).

A developed market is one which has reached the most advanced levels of development in its economy and capital markets.


Markets (in order of economic development) are often classified as:

Developed;
Emerging;
Frontier;
Least Developing.


Different organisations produce slightly different lists of countries within each of these categories.

Examples of developed markets in MSCI's classification include - in alphabetical order - Australia, Austria, Belgium, Canada and Denmark.


See also


External link