Discount Factors (Money Markets)
In this video, Abdulla explains discount factors as they specifically apply to money markets.
Overview
The discount factor used to calculate the present value of a money market fund must take into account the accrual time of the fund. This discount factor is used specifically for the money market, where securities mature in less than one year (so the formula has no exponents).
Key learning objectives:
Knowing the PV formula for money markets and understanding the terms
Summary
Expert
Abdulla Javeri
Abdulla’s career in the financial markets started in 1990 when he entered the trading floor of the London International Financial Futures Exchange, LIFFE, and qualified as a pit trader in equity and equity index options. In 1996, Abdulla became a trainer for regulatory qualifications and then for non-exam courses, primarily covering all major financial products.
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