Chapter 1 Finance 320 Notes:
-Jeremy Bentham classified 12 pains and 14 pleasures to test the happiness factor (utility) of any action.
Maximizing utility is the foundation for modern economics and finance.
-Cost/benefit analysis=NPV Analysis (in finance)
Chapter 5 Finance 320: Interest Rates
Interest Rate Quotes and Adjustments:
-Interest rates are set by market forces, in particular the supply and demand of funds.
-The EAR or APY indicates the actual amount of interest earned in one year. The EAR can be