Explain What Rebates Are and How They Are Accounted for in the Financial

question 16

Essay

Explain what rebates are and how they are accounted for in the financial statements.

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Definitions:

Par

Par refers to the face value of a bond or stock, which is the amount originally paid for it and the amount that will be repaid at maturity.

Geometric Average Return

The compounded annual rate of return over time, accounting for the compounding of investment returns.

Arithmetic Average Return

A method of calculating the average return of an investment by simply dividing the sum of all returns by the number of periods.

Dollar-Weighted Return

An investment's return that takes into account the timing and amount of capital inflows and outflows, reflecting the investor's actual experienced rate of return.