3012 ✦ Chapter 50: Investments Figure 50.19 Uniform Cashflow Specification Clicking Subtract subtracts the current cashflow from the Generic Cashflow dialog box, and it returns you to the Generic Cashflow dialog box. You can generate arithmetic and geometric specifications by clicking them within the Series Flow Type area. However, you must enter a value for the Gradient . In both cases the Level value is the value of the list at the Starting Date . With an arithmetic flow type, entries increment by the value Gradient for each Time Interval . With a geometric flow type, entries increase by the factor Gradient for each Time Interval . Figure 50.20 displays an arithmetic cashflow with a Level of 100 and a Gradient of 12. Generic Cashflow Tasks ✦ 3013 Figure 50.20 Arithmetic Cashflow Specification Including a Forecasted Cashflow To generate date-amount pairs for the Cashflow Specification area, follow these steps: 1. Right-click in the Cashflow Specification area and release on Forecast to open the Forecast Specification dialog box. 2. Enter sashelp.retail as the Data Set. 3. Select SALES for the Analysis Variable. 4. Click Compute Forecast to generate the forecast. You can visualize the forecast in the Cashflow Chart area (see Figure 50.21). 5. Click Add to add the forecast to the list in the Generic Cashflow dialog box. Clicking Add also returns you to the Generic Cashflow dialog box. 3014 ✦ Chapter 50: Investments Figure 50.21 Cashflow Forecast Clicking Subtract subtracts the current forecast from the Generic Cashflow dialog box, and it returns you to the Generic Cashflow dialog box. To review the values from the SAS data set you forecast, click View Table or View Graph. You can adjust the following values for the SAS data set you forecast: Time ID Variable , Time Interval, and Analysis Variable. You can adjust the following values for the forecast: the Horizon , the Confidence , and choice of predicted value, lower confidence limit, and upper confidence limit. Using the Cashflow Chart Three dialog boxes contain the Cashflow Chart to aide in your visualization of cashflows: Generic Cashflow , Flow Specification , and Forecast Specification . Within this chart, you possess the following tools: You can click on a bar in the plot and view its Cashflow Date and Cashflow Amount. You can change the aggregation period of the view with the box in the lower-left corner of the Cashflow Chart . You can take the quarterly sales figures from the previous example, select YEAR as the value for this box, and view the annual sales figures. You can change the number in the box to the Loan ✦ 3015 right of the horizontal scroll bar to alter the number of entries you want to view. The number in that box must be no greater than the number of entries in the cashflow list. Lessening this number has the effect of zooming in upon a portion of the cashflow. When the number is less than the number of entries in the cashflow list, you can use the scroll bar at the bottom of the chart to scroll through the chart. Dialog Box Guide Loan Selecting Investment ! New ! Loan from the Investment Analysis dialog box’s menu bar opens the Loan dialog box displayed in Figure 50.22. Figure 50.22 Loan Dialog Box The following items are displayed: Name holds the name you assign to the loan. You can set the name here or within the Portfolio area of the Investment Analysis dialog box. This must be a valid SAS name. The Loan Specification area gives access to the values that define the loan. Loan Amount holds the borrowed amount. Periodic Payment holds the value of the periodic payments. 3016 ✦ Chapter 50: Investments Number of Payments holds the number of payments in loan terms. Payment Interval holds the frequency of the Periodic Payment. Compounding Interval holds the compounding frequency. Initial Rate holds the interest rate (a nominal percentage between 0 and 120) you pay on the loan. Start Date holds the SAS date when the loan is initialized. The first payment is due one Payment Interval after this time. Initialization opens the Loan Initialization Options dialog box where you can define initial- ization costs and down-payments relevant to the loan. Prepayments opens the Loan Prepayments dialog box where you can specify the SAS dates and amounts of any prepayments. Balloon Payments opens the Balloon Payments dialog box where you can specify the SAS dates and amounts of any balloon payments. Rate Adjustments opens the Rate Adjustment Terms dialog box where you can specify terms for a variable-rate loan. Rounding Off opens the Rounding Off dialog box where you can select the number of decimal places for calculations. Create Amortization Schedule becomes available when you adequately define the loan within the Loan Specification area. Clicking it generates the amortization schedule. Amortization Schedule fills when you click Create Amortization Schedule . The schedule con- tains a row for the loan’s start-date and each payment-date with information about the following: Date is a SAS date, either the loan’s start-date or a payment-date. Beginning Principal Amount is the balance at that date. Periodic Payment Amount is the expected payment at that date. Interest Payment is zero for the loan’s start-date; otherwise it holds the interest since the previous date. Principal Repayment is the amount of the payment that went toward the principal. Ending Principal is the balance at the end of the payment interval. Print becomes available when you generate the amortization schedule. Clicking it sends the contents of the amortization schedule to the SAS session print device. Save Data As becomes available when you generate the amortization schedule. Clicking it opens the Save Output Dataset dialog box where you can save the amortization table (or portions thereof) as a SAS Dataset. OK returns you to the Investment Analysis dialog box. If this is a new loan specification, clicking OK appends the current loan specification to the portfolio. If this is an existing loan specification, clicking OK returns the altered loan specification to the portfolio. Cancel returns you to the Investment Analysis dialog box. If this is a new loan specification, clicking Cancel discards the current loan specification. If this is an existing loan specification, clicking Cancel discards the current changes. Loan Initialization Options ✦ 3017 Loan Initialization Options Clicking Initialization in the Loan dialog box opens the Loan Initialization Options dialog box displayed in Figure 50.23. Figure 50.23 Loan Initialization Options Dialog Box The following items are displayed: The Price, Loan Amount and Downpayment area contains the following information: Purchase Price holds the actual price of the asset. This value equals the loan amount plus the downpayment. Loan Amount holds the loan amount. % of Price (to the right of Loan Amount ) updates when you enter the Purchase Price and either the Loan Amount or Downpayment . This holds the percentage of the Purchase Price that comprises the Loan Amount . Setting the percentage manually causes the Loan Amount and Downpayment to update. Downpayment holds any downpayment paid for the asset. % of Price (to the right of Downpayment ) updates when you enter the Purchase Price and either the Loan Amount or Downpayment . This holds the percentage of the Purchase Price that comprises the Downpayment . Setting the percentage manually causes the Loan Amount and Downpayment to update. 3018 ✦ Chapter 50: Investments Initialization Costs and Discount Points area Loan Amount holds a copy of the Loan Amount above. Initialization Costs holds the value of any initialization costs. % of Amount (to the right of Initialization Costs ) updates when you enter the Purchase Price and either the Initialization Costs or Discount Points . This holds the percentage of the Loan Amount that comprises the Initialization Costs . Setting the percentage manually causes the Initialization Costs to update. Discount Points holds the value of any discount points. % of Amount (to the right of Discount Points ) updates when you enter the Purchase Price and either the Initialization Costs or Discount Points . This holds the percentage of the Loan Amount that comprises the Discount Points . Setting the percentage manually causes the Discount Points to update. OK returns you to the Loan dialog box, saving the information that is entered. Cancel returns you to the Loan dialog box, discarding any changes made since you opened the dialog box. Loan Prepayments Clicking Prepayments in the Loan dialog box opens the Loan Prepayments dialog box displayed in Figure 50.24. Figure 50.24 Loan Prepayments Dialog Box The following items are displayed: Uniform Prepayment holds the value of a regular prepayment concurrent to the usual periodic payment. Rate Adjustment Terms ✦ 3019 Prepayments holds a list of date-amount pairs to accommodate any prepayments. Right-clicking within the Prepayments area reveals many helpful tools for managing date-amount pairs. OK returns you to the Loan dialog box, storing the information entered on the prepayments. Cancel returns you to the Loan dialog box, discarding any prepayments entered since you opened the dialog box. Balloon Payments Clicking Balloon Payments in the Loan dialog box opens the Balloon Payments dialog box dis- played in Figure 50.25. Figure 50.25 Balloon Payments Dialog Box The following items are displayed: Balloon Payments holds a list of date-amount pairs to accommodate any balloon payments. Right- clicking within the Balloon Payments area reveals many helpful tools for managing date-amount pairs. OK returns you to the Loan dialog box, storing the information entered on the balloon payments. Cancel returns you to the Loan dialog box, discarding any balloon payments entered since you opened the dialog box. Rate Adjustment Terms Clicking Rate Adjustments in the Loan dialog box opens the Rate Adjustment Terms dialog box displayed in Figure 50.26. 3020 ✦ Chapter 50: Investments Figure 50.26 Rate Adjustment Terms Dialog Box The following items are displayed: The Rate Adjustment Terms area Life Cap holds the maximum deviation from the Initial Rate allowed over the life of the loan. Periodic Cap holds the maximum adjustment allowed per adjustment. Adjustment Frequency holds how often (in months) the lender can adjust the interest rate. The Rate Adjustment Assumption determines the scenario the adjustments will take. Worst Case uses information from the Rate Adjustment Terms area to forecast a worst-case scenario. Best Case uses information from the Rate Adjustment Terms area to forecast a best-case scenario. Fixed Case specifies a fixed-rate loan. Estimated Case uses information from the Rate Adjustment Terms and Estimated Rate area to forecast a best-case scenario. Estimated Rates holds a list of date-rate pairs, where each date is a SAS date and the rate is a nominal percentage between 0 and 120. The Estimated Case assumption uses these rates for its calculations. Right-clicking within the Estimated Rates area reveals many helpful tools for managing date-rate pairs. OK returns you to the Loan dialog box, taking rate adjustment information into account. Savings ✦ 3021 Cancel returns you to the Loan dialog box, discarding any rate adjustment information provided since opening the dialog box. Rounding Off Clicking Rounding Off in the Loan dialog box opens the Rounding Off dialog box displayed in Figure 50.27. Figure 50.27 Rounding Off Dialog Box The following items are displayed: Decimal Places fixes the number of decimal places your results will display. OK returns you to the Loan dialog box. Numeric values will then be represented with the number of decimals specified in Decimal Places. Cancel returns you to the Loan dialog box. Numeric values will be represented with the number of decimals specified prior to opening this dialog box. Savings Selecting Investment ! New ! Savings from the Investment Analysis dialog box’s menu bar opens the Savings dialog box displayed in Figure 50.28. . the chart. Dialog Box Guide Loan Selecting Investment ! New ! Loan from the Investment Analysis dialog box’s menu bar opens the Loan dialog box displayed in Figure 50 .22. Figure 50 .22 Loan Dialog Box The. 3012 ✦ Chapter 50: Investments Figure 50. 19 Uniform Cashflow Specification Clicking Subtract subtracts the current cashflow from the Generic. value of a regular prepayment concurrent to the usual periodic payment. Rate Adjustment Terms ✦ 30 19 Prepayments holds a list of date-amount pairs to accommodate any prepayments. Right-clicking within