Showing 71 to 80 of 6519 Questions
  • A 30-year, $235,000 mortgage has a rate of 7.1 percent. What are the interest and principal portions in the first payment? In the second?

  • A 40-year-old individual establishes a retirement account that is expected to earn 7 percent annually. Contributions will be $2,000 annually at the beginning of each year. Initially, the saver expects to start drawing on the account at age 60.a) How much will be in the account when the saver is age 60?b) If this investor found a riskier i

  • A 45-year-old woman decides to put funds into a retirement plan. She can save $2,000 a year and earn 9 percent on this savings. How much will she have accumulated if she retires at age 65? At retirement how much can she withdraw each year for 20 years from the accumulated savings if the savings continue to earn 9 percent?

  • A 9-year bond has a yield of 10% and a duration of 7.194 years. If the market yield changes by 50 basis points, what is the percentage change in the bond’s price?

  • A bearish spread is the purchase of a call with exercise price X2 and the sale of a call with exercise price X1, with X2 greater than X1. Graph the payoff to this strategy and compare it toFigure.

  • A bidder paid $1,250 for a target. The target’s market asset is $2,000 and market liability is $1,050. What is the goodwill created during the acquisition?

  • A biotechnology firm is growing at a compound rate of more than 21 percent a year. (Its ROE is over 30 percent, and it retains about 70 percent of its earnings.) The stock of this company is priced at about 65 times next year's earnings. Discuss whether you consider this a growth company and/or a growth stock.

  • A bond for the Chelle Corporation has the following characteristics:Maturity-12 years Coupon-10% Yield to maturity-9.50% Macaulay duration-5.7 years Convexity-48 Noncallablea. Calculate the approximate price change for this bond using only its duration, assuming its yield to maturity increased by 150 basis points. Discuss (without calcula

  • A bond has a current yield of 9% and a yield to maturity of 10%. Is the bond selling above or below par value? Explain.

  • A bond has the following features: • Coupon rate of interest: 5 percent • Principal: $1,000 • Term to maturity: 10 years a. What will the holder receive when the bond matures? b. If the current rate of interest on comparable debt is 8 percent, what should be the price of this bond? Would you expect the firm to call this bond? Why?

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