1 No Spac... Heading 1 Heading 2 1 Normal Paragraph Title KI Today's Money Market Yield: 0.75% Styles 12 Mortgage Rates 30 year 15 year 4.25% 3.15% 1. Suppose Katherine and James buy a $900k property and finance $600k with a 30 year mortgage. a. (Apts) What is the capital allocation of the property purchase? b. (Spts) What is the PMT for the mortgage? And what is the PMT if they pay it off in 20 Mears? N PV PMT FV a. 2. (16pts.) Answer the following: True or False: When market rates decline prices of bonds rise in general. b. True or False: Zeros can trade at par. True or False: As terms increase the rate of return rises in a normal yield curve. d. True or False: Primary market coupon bonds sell at par. C. 3. (8 pts.) ile IE I Normal 1 No Spac. Heading 1 Heading 2 Title Paragraph 12 Styles 3. (8 pts.) Unilever issued 30 year 7% bonds. What is the YTM 16 years after issue when selling at 107% of par? What is the price of the same bond 4 years later when rates have risen.35% N PV PMT FV I 4. (16pts.) Answer the following: 8. True or False CEO and CFO are principals b. True or False: Money market is part of the debt market C. True or False: High credit ratings mean bonds have lower default risk. d. True or False: Secondary market stocks are the same as IPOs. D) Focu Aa u T AEEE AaBbCcDc AaBbCcDc AaBbC AaBbcc Aa 1 No Spac... Heading 1 Heading 2 I Normal Title Paragraph Suppose USD/EUR = 1.1300 and USD/GBP = 5300 Styles 5. (4 pts) Calculate GBP/USD = 6. (4 pts) Calculate EUR/USD = Unilever trades on the London Stock Exchange for 36 GBP per share and has a dividend of 1.25 GBP. 7. (4 pts) Unilever stock trades at what price in EUR in Amsterdam? 8. (4 pts) Unilever stock trades at what price in USD in New York? 9. (4 pts) Suppose you purchase a zero with 10 years until maturity in a 5% market. What is the price of the zero? (Use FV = PV (1+i)") I Stock Unilever (UN OF UL) Hasbro (HAS) General Electric (GE) Market Price $42 $85 Dividend Yield 296 2.5% 396 $35 10. (4 pts) What is the dividend for Hasbro? 11. (4 pts) How are stock dividends paid? 12. (4 pts) Suppose you buy GE for the above price and receive the following returns over four years: 5%, -6%, 10 % and 1%. What is the value of a share of GE now? DEC 1 No Spac... Heading 1 Heading 2 1 Normal Paragraph Title KI Today's Money Market Yield: 0.75% Styles 12 Mortgage Rates 30 year 15 year 4.25% 3.15% 1. Suppose Katherine and James buy a $900k property and finance $600k with a 30 year mortgage. a. (Apts) What is the capital allocation of the property purchase? b. (Spts) What is the PMT for the mortgage? And what is the PMT if they pay it off in 20 Mears? N PV PMT FV a. 2. (16pts.) Answer the following: True or False: When market rates decline prices of bonds rise in general. b. True or False: Zeros can trade at par. True or False: As terms increase the rate of return rises in a normal yield curve. d. True or False: Primary market coupon bonds sell at par. C. 3. (8 pts.) ile IE I Normal 1 No Spac. Heading 1 Heading 2 Title Paragraph 12 Styles 3. (8 pts.) Unilever issued 30 year 7% bonds. What is the YTM 16 years after issue when selling at 107% of par? What is the price of the same bond 4 years later when rates have risen.35% N PV PMT FV I 4. (16pts.) Answer the following: 8. True or False CEO and CFO are principals b. True or False: Money market is part of the debt market C. True or False: High credit ratings mean bonds have lower default risk. d. True or False: Secondary market stocks are the same as IPOs. D) Focu Aa u T AEEE AaBbCcDc AaBbCcDc AaBbC AaBbcc Aa 1 No Spac... Heading 1 Heading 2 I Normal Title Paragraph Suppose USD/EUR = 1.1300 and USD/GBP = 5300 Styles 5. (4 pts) Calculate GBP/USD = 6. (4 pts) Calculate EUR/USD = Unilever trades on the London Stock Exchange for 36 GBP per share and has a dividend of 1.25 GBP. 7. (4 pts) Unilever stock trades at what price in EUR in Amsterdam? 8. (4 pts) Unilever stock trades at what price in USD in New York? 9. (4 pts) Suppose you purchase a zero with 10 years until maturity in a 5% market. What is the price of the zero? (Use FV = PV (1+i)") I Stock Unilever (UN OF UL) Hasbro (HAS) General Electric (GE) Market Price $42 $85 Dividend Yield 296 2.5% 396 $35 10. (4 pts) What is the dividend for Hasbro? 11. (4 pts) How are stock dividends paid? 12. (4 pts) Suppose you buy GE for the above price and receive the following returns over four years: 5%, -6%, 10 % and 1%. What is the value of a share of GE now? DEC