R3M Debenture: Issue and Trading Details for Reserve Bank Nominal Value

  • Context: Undergrad 
  • Thread starter Thread starter Lungi Mchunu
  • Start date Start date
Click For Summary

Discussion Overview

The discussion revolves around the R3M Debenture, focusing on its issue and trading details, including nominal value, interest rates, and market considerations. Participants explore the financial implications and definitions related to the trading of this instrument.

Discussion Character

  • Debate/contested, Conceptual clarification, Technical explanation

Main Points Raised

  • One participant presents the nominal value, issue date, expiry date, and interest rate of the R3M Debenture, seeking help with calculating the consideration in the secondary market based on given interest rates and time periods.
  • Another participant asserts that the problem is not fundamentally mathematical but rather rooted in understanding economic definitions and basic formulas, suggesting that the math involved is limited to arithmetic.
  • A subsequent reply reiterates that the problem is not a mathematics issue, emphasizing the distinction between finance/accountancy and the use of more complex mathematics in economics.
  • One participant expresses concern about potentially offending economists while sharing a personal anecdote about their brother's profession in accountancy.

Areas of Agreement / Disagreement

Participants express differing views on whether the problem is primarily mathematical or economic in nature, indicating a lack of consensus on the characterization of the issue.

Contextual Notes

Participants reference specific definitions and formulas related to finance and economics, but there are unresolved assumptions regarding the application of these concepts to the problem at hand.

Who May Find This Useful

Individuals interested in finance, economics, or accountancy may find the discussion relevant, particularly those looking to understand the nuances of trading instruments like debentures.

Lungi Mchunu
Messages
2
Reaction score
0
Nominal Value: R3 000 000
Issue Date: 1 January 2006
Expiry Date: 30 June 2006
Interest Rate: 9,25%

On 25 February this instrument trades at an interest of 8,50%. The number of days from 1 Jan 2006 to 25 February is 55 days, from 25 February to 30 June is 125 days and from 1 Jan 2006 to 30 June 2006 there are 180 days. What is the consideration in the secondary market?
PLEASE HELP!
 
Physics news on Phys.org
This is NOT a mathematics problem! Once you know the definitions of all those terms, and the basic formulas, which are really Economics, the only math involved is arithmetic.
 
Thanks!
 
HallsofIvy said:
This is NOT a mathematics problem! Once you know the definitions of all those terms, and the basic formulas, which are really Economics, the only math involved is arithmetic.

Don't foist that onto economists, who do use real math (though not as much as mathematicians, of course). This is a problem of finance or accountancy, which use no more than basic arithmetic.
 
Sorry, I didn't mean to offend economist!

On the other hand, my brother is an accountant and makes four times as much as I do.
 

Similar threads

  • · Replies 2 ·
Replies
2
Views
7K
  • · Replies 0 ·
Replies
0
Views
3K
  • · Replies 114 ·
4
Replies
114
Views
20K
Replies
20
Views
11K
  • · Replies 6 ·
Replies
6
Views
4K
  • · Replies 3 ·
Replies
3
Views
4K
  • Poll Poll
  • · Replies 13 ·
Replies
13
Views
5K
  • · Replies 65 ·
3
Replies
65
Views
12K
  • · Replies 2 ·
Replies
2
Views
3K