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Finance Questions and Answers July 6, 2016

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(Related to Checkpoint 8.3) (Systematic risk and expected rates of return) The following table, contains beta coofficient estimates for six firms. Calculate the expected increase in the value of each firm's shares if the market portfolio were to increase by 10 percent. Perform tho samo calculation where the market drops by 10 percent. Which set of
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20. Suppose a stock is expected to pay a $0.50 dividend every year for the next 1,000 years. The required return is 10% with annual compounding. What is the price of this stock? (a.) \$5 b. $5.50 c. $0.05 d. None of the above. 21. Suppose FinTech, Inc. just paid a dividend of $0.55 per share. It is expected to increase its dividend by 2.25% per
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You want to buy a house that will need to be financed. Look at different options and decide which will be the best choice for your situation. Determine financing options, and understand contracts involves. 1. Determine what kind of house is best for you. Why you choose that kind of house? (5 Marks) You may use online resources to find info about
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) A U.S. firm holds an asset in Great Britain and faces the following scenario: State 1 State 2 State 3 Probability 25% 50% 25% Spot rate $ 2.20 / $ 2.00 / $ 1.80 / P* 2,000 2,500 3,000 P $ 4,400 $ 5,000 $ 5,400 P * = Pound sterling price of the asset held by the U.S. firm P = Dollar price of the same asset What is the "exposure" (i.e. the

Kennedy Air Services is now in the final year of a project. The equipment originally cost $20.000, of which 52% has been depreciated. Kennedy can sell the used equipment today for $13,000, and its tax rate is 40%. What is the equipment's after-tax salvage value? $1,360 $2,040 $9,600 $11,640 $3,400
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Given the monthly returns that follow: Month Portfolio Return S&P 500 Return Jan 5.5% 5.8% Feb -2.4 -3.3 Mar -1.8 -1.5 Apr 2.7 2.0 May 0.7 -0.1 June -0.9 -0.4 July 0.1 0.5 August 1.5 2.0 Sept -0.8 -0.6 October -3.2 -3.7 November 2.4 1.6 December 0.6 0.1 A. Find the R 2 , alpha (%), and beta of the portfolio. B. Compute the average return different

The Fisher effect is used to determine the: Group of answer choices real spot rate. real forward rate. real interest rate. real inflation rate.

The only capital investment required for a small project is investment in inventory. Profits this year were $ 1 2 , 0 0 0 , and inventory increased from $ 5 , 0 0 0 to $ 7 , 0 0 0 . What was the cash flow from the project? Total cash flow
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Consider the following information: Rate of Return if State Occurs State of Economy Boom Bust Probability of State of Economy 73 27 Stock A 11 .20 Stock B 05 .26 Stock C 31 -.11 a. What is the expected return on an equally weighted portfolio of these three stocks? (Do not round intermediate calculations and enter your answer as a percent rounded
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7. Which of the following statements about NPV and IRR is least accurate? A) The IRR can be positive even if the NPV is negative. B) When the IRR is equal to the cost of capital, the NPV will be zero. C) The NPV will be positive if the IRR is less than the cost of capital
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4. How long will it take for $100,000 to accumulate to $150,000 if money is worth 3.9% compounded monthly? Express your answer in both years and months as discussed in the power points and round the month to one decimal. (6 marks)
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Cook borrows $5,000 from a corporation in which he is a shareholder, interest free, in order to purchase a corporate bond paying 8% interest (assume the purpose of the loan is NOT tax avoidance). The federal rate is still 5%, and Seth's net investment income is now $2,000 (from a corporate dividend). What (if any) is the taxable interest of this
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According to the following information, what is the firm's optimal capital structure? Proportion Earnings Per Weighted Average Cost of Capital (WACC), of Debt Share (EPS) 30% $2.50 13.2% 40 3.80 12.7 50 4.75 12.4 60 5.25 12.8 To determine the optimal capital structure, the market value of the stock must be known. 60% 0 30% 50% 40%
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The most recent data from the annual balance sheets of Free Spirit Industries Inc. are given in the balance sheet and the income statement given below: A B D G EF Income Statement 1 Balance Sheet 2 3 Assets Liabilities & Equity Net Sales 1,500 4 4 Current assets: Current liabilities: 1,040 Operating costs except depreciation and amortization 5
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212 Ramblin Wreck is a firm specializing in engineering components. The firm is publicly traded and is considering the following project The project will last 5.00 years with an annual cash flow of $20.00 million. The project will require an initial investment of $140 00 million The firm must determine the cost of capital to evaluate the project
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Compute the discounted payback statistic for Project D if the appropriate cost of capital is 11 percent and the maximum allowable discounted payback is four years. (Do not round intermediate calculations and round your final answer to 2 decimal places. If the project does not pay back, then enter a "O" (zero).) Project D Time: Cash flow: 0 1 2
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Question 57 (0.5 points) Saved 15 years from now, your 2-year old son will be attending Harvard. You have determined he will need $70,000 per year for tuition and living expenses (Each year of the college, he needs to pay the $70,000 at the beginning of the year. I.e. the first payment is 15 years from today.). In 15 years, you will give him a
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Discussion Prompt & Information The topic of this discussion is on the banking system. Specifically answer this prompt: What are the benefits and drawbacks of a fractional reserve banking system? If you were in charge of making policy on our financial system, what required reserve ratio would you set and why? Note: Be sure to read and follow the
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Consider a 3 . 5 percent TIPS with an issue CPI reference of 1 8 5 . 6 . The bond is purchased at the beginning of the year ( after the interest payment ) , when the CPI was 1 9 3 . 5 . For the interest payment in the middle of the year, the CPI was 1 9 5 . 1 . Now, at end of the year, the CPO is 1 9 9 . 6 and the interest payment has been made.

Compute the IRR for Project F. The appropriate cost of capital is 12 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Project F Time: 0 1 2 3 4 Cash flow $10,300 $3,950 $4,780 $2,120 $2,750 IRR %

MEGAFRAME COMPUTER COMPANY Balance Sheet As of December 31 ASSETS Cash Accounts receivable Inventory Net plant and equipment Total assets $ 50,000 70,000 110,000 220,000 $ 450,000 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable Accrued expenses Long-term debt Common stock Paid-in capital Retained earnings Total liabilities and stockholders'
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Consider the following scenario analysis 7 Scenario Recession Normal economy Boom Probability 9.3 8.4 0.3 Rate of Return Stocks Bonds -6% 183 19 8 22 5 176 points Skipped Assume a portfolio with weights of 0.60 in stocks and 0.40 in bonds. a. What is the rate of return on the portfolio in each scenario? (Enter your answer as a percent rounded to 1
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An ordinary annuity consists of a ( n ) Blank _ _ _ _ _ _ stream of cash flows for a fixed period of time. Multiple choice question. infinite level random uneven

An investment will pay $ 2 7 8 2 0 0 $ 2 7 8 , 2 0 0 at the end of next year for an investment of $ 2 0 0 0 0 $ 2 0 0 , 0 0 0 at the start of the year. If the market interest rate is 7 7 % over the same period, should this investment be made?

Question The following transactions resulted for Mel's Delivery Service during the month of July 2021: A. Mel invested $10,000 in the business from his personal savings account. B. Bought delivery truck on cash, $17,000. C. Advertising bill received but unpaid, $700. D. Bought office equipment for cash, $1,200. E. Received cash for delivery

You are considering the purchase of a Treasury bill and observe the following quotes for T-bills in the market: What is the price of the 144-day bill? What would be the effective annual rate of return on your investment if you held the bill to maturity? What would be the effective annual rate of return on your investment if you bought this bill
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15 You are considering a new product launch The project will cost $790.000 have a 4-year life, and have no salvage val depreciation is straight-line to zero Sales are projected at 180 unts per year, price per unit will be $15.325, variable cost per unit will be $1,150, and fred costs will be 5540.000 per year. The required return on the project is
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A trader owns 55,000 units of a particular asset and decides to hedge the value of her position with futures contracts on another related asset. Each futures contract is on 5,000 units. The spot price of the asset that is owned is $28 and the standard deviation of the change in this price over the life of the hedge is estimated to be $0.43. The

Item Prior year Current year Accounts payable 8,151.00 7,817.00 Accounts receivable 6,084.00 6,787.00 Accruals 996.00 1,516.00 Cash ??? ??? Common Stock 10,418.00 12,656.00 COGS 12,637.00 18,191.00 Current portion long-term debt 4,908.00 5,011.00 Depreciation expense 2,500 2,790.00 Interest expense 733 417 Inventories 4,288.00 4,787.00 Long-term

Modern Artifacts can produce keepsakes that will be sold for $50 each. Nondepreciation fixed costs are $700 per year, and variable costs are $40 per unit. The initial investment of $2,100 will be depreciated straight-line over its useful life of 3 years to a final value of zero, and the discount rate is 16%. a. What is the degree of operating

Bob is a bond portfolio manager at FX Capital Partners. His fund recently purchased $500 million principal value of 2-year 10% coupon bonds at par value. Assume that the term structure of interest rates is flat. Under each of the following 3 scenarios, calculate the actual rate of return earned on this bond investment, assuming FX Capital Partners

Suppose a firm has a retention ratio of 35 percent, net income of $31.1 million, and 6.1 million shares outstanding. What would be the dividend per share paid out on the firm's stock? $1.78 $.65 $5.10 $3.31

A 5-year annuity of ten $6,000 semiannual payments will begin 10 years from now, with the first payment coming 10.5 years from now. a. If the discount rate is 11 percent compounded monthly, what is the value of this annuity 5 years from now? b. What is the current value of the annuity
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,v I need the answer ASAP PLEASE, dont worry writting out a lot of details, just need the calculations and answer

Dewey has one share of stock and one bond. The total value of the two securities is $1,050. The bond has a YTM of 18.60 percent, a coupon rate of 12.40 percent, and a face value of $1,000; pays semi-annual coupons with the next one expected in 6 months; and matures in 6 years. The stock pays annual dividends that are expected to grow by 1.73

HSU is an all-equity firm and its net income is $135,000. The firm has 30,000 shares outstanding and has a dividend payout ratio of 1. The value of the firm next year is expected to be $1.985 million. The cost of capital of the firm is 12%. Assume there is no tax for dividend. Senior management of the firm suggests that, to increase the stock

You are given the following information concerning a noncallable, sinking fund debenture: Principal: $1,000 Coupon rate of interest: 7 percent Term to maturity: 12 years Sinking fund: 3 percent of outstanding bonds retired annually; the balance at maturity If you buy the bond today at its face amount and interest rates rise to 12 percent after
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Subject: Math Finance Mr. Sam buys RM8000 worth of home furnishings from the KingQueen House Deco. He pays RM1000 down and agrees to pay the balance with monthly payments over 5 years at 10% compounded monthly. The contract he signs stipulates that if he pays off the contract early there is penalty equal to three months payments. After two years,
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If an adjustable-rate 30-year mortgage for $120,000 starts at 4.0 percent and increases to 5.5 percent, what is the increase in the monthly payment amount? Use Exhibit 7-7. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Monthly payment increase
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For the following stock investment, find (a) the total purchase price, (b) the total dividend amount, (c) the capital gain or loss, (d) the total return, and (e) the percentage return. Ignore broker and SEC fees (a) What is the total purchase price? (b) What is the total dividend amount? (c) What is the capital gain or loss? (d) What is the total
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Consider the following probability distribution for stocks A and B: State 1 2 Probability 0.20 0.15 0.40 0.10 0.15 Return on Stock A 5.0% 7.0% -8.0% 6.0% 9.0% Return on Stock B 8.0% 5.0% 9.0% -15.0% 6.0% 3 4 5 Question 7 The expected rates of return of stocks A and B are closest to and , respectively A B D 5.00%; 8.00% -8.0%; 9.00% 8.00%; 4.00%
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three part question 13. Consider the following two investment alternatives: First, a risky portfolio that pays a 18% rate of retum with a probability of 22% or a 7.2% rate of return with a probability of 40%. Second, a Treasury bill that pays 3.4%. If you invest $100,000 in the risky portfolio, your expected profit after one year would be 14. You
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SA CX Enterprises has the following expected dividends: $1.00 in one year, 51.15 in two years, and $1.25 in three years. After that, its dividends are expected to grow at 4% per year forever so that year 4's dividend will be 4% more than $1.25 and so on). If CX's equity cost of capital is 11%, what is the current price of its stock? $14.27 $15.98
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Barry Boswell is a financial analyst for Dossman Metal Works, Inc. and he is analyzing two alternative configurations for the firm's new plasma cutter shop. The two alternatives, denoted A and B below, will perform the same task, but alternative A will cost $90,000 to purchase, while alternative B will cost only $50,000 . Moreover, the two

I do believe this is an "IF" statement formula that is needed, just a bit confused on how to execute it. Looking for some help. The second page is the benefits code. That the prior VLookup formula was created from for E5:G5, but not sure if it is needed! Here is the question: "Insert a function in cell H5 to calculate Total Employee Cost for the
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b. Yusof borrows RM 75,000 from a bank to buy a new car. He pays RM 1500 monthly for 8 years with the first payment starting one month after loan commencing. i. ii. Determine the effective annual interest rate of the loan. Calculate the outstanding balance of the loan after 2 years. Calculate the interest paid in the last payment. Determine the
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Please help me explain why the answer is this Question 3 1 / 1 pts A CEO has a 10% chance of meeting earnings estimates at regular effort, and a 20% chance at extraordinary effort, which costs the CEO an additional $25,000. To encourage extraordinary effort, the bonus that the CEO should be paid for meeting estimates is 0 $125,000. $25,000.
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Question 24 (1 point) Which of the following statement(s) about "beta" is/are true? 1) "Beta" is a relative measure of risk measured with reference to the market portfolio ii) for example: "Beta" of 1.2 indicates above average risk III) for example: "Beta" of 0.5 indicates below average risk IV) for example "Beta" of 1.0 indicates avearage risk 1,
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If the brokerage account was titled "Harry and Harriet, Joint Tenancy with the Right of Survivorship" and Harry passed away: ( Select the best answer below. ) A . Harry's heirs would receive Harry's shares without the shares passing through probate. B . Harriet would receive Harry's shares without the shares passing through probate. C . Both
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Oxy Corporation uses debt, preferred stock, and common stock to raise capital. The firm's capital structure targets the following proportions: debt, 40% preferred stock, 18%; and common stock 42% the cost of debt is 5.3%, preferred stock costs 9.7%, and common stock costs 10.3%, what is Oxy's weighted average cost of capital (WACC)? Oxy's weighted
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Tesla is planning to produce an all-electric family car and expects the following cash flows (in $ million) at the end of each year: Year Cash flow 0 -50 1 -100 20 40 4 80 5 80 The company requires a return of 8% from this project. What is the NPV (in $ million)? 1+ decimals Submit Part 2 What is the project's profitability index? 2+ decimals
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Mark Up and Mark downs 1. Answer the following questions on Markups. (Value 5-1 mark each) All answer must contain two decimal places unless otherwise stated. a) Find the selling price for a Timmons solar-powered watch if the cost is $35.60 and the markup is 45% of cost. b) A cheese merchant buys a case of cheese for a listed price of $98.00 from
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Assume the following budgeted information for a merchandising company: Budgeted sales ( all on credit ) for November, December, and January are $ 2 5 9 , 0 0 0 , $ 2 2 9 , 0 0 0 , and $ 2 2 0 , 0 0 0 , respectively. Cash collections related to credit sales are expected to be 7 5 % in the month of sale, 2 5 % in the month following the sale. The
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Using the portfolio and economy information below, calculate the Expected Value of Perfect Information. Future Economy Bullish Stable Portfolios Bearish Bonds 3% 5% 6% 28% -16% Stocks Mixed Probability 12% 9% 32% -3% 22% 44% 34% Work out the calculations in excel and submit the excel sheet here
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Using the tax table, determine the amount of taxes for the following situations: (Do not round intermediate calculations. Round your answers to 2 decimal places.) a. A head of household with taxable income of $59,500. Tax amount $ b. A single person with taxable income of $35,800. Tax amount $ c. Married taxpayers filing jointly with taxable
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Please help me solve the following: your assessment of the relative riskiness of the Google investment (analyzed in the previous problem) compared to investing in the S&P index (recall from Chapter 2 that you can purchase mutual funds that mimic the returns to the index)? (Calculating rates of return) The common stock of Placo Enterprises had a
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So far, things have gone well with Dr. Washington Before you wrap up your meetings and he begins investing, you decide to spend a little time sharing information with him about using derivatives to manage risk and enhance returns in his stock portfolio .You decide the best way to illustrate this is via a call option that he can use on a stock that
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A company's 5-year bonds are yielding 8.3% per year. Treasury bonds with the same maturity are yielding 5.95% per year, and the real risk-free rate (r*) is 2.85%. The average inflation premium is 2.7%, and the maturity risk premium is estimated to be 0.1(t - 1)%, where t = number of years to maturity. If the liquidity premium is 1.45%, what is the

Assume the Wendy and Will Wolverine fact pattern. Will Wolverine dies at age 45, leaving his 403(b) plan to his spouse, Wendy, who is also age 45 and the sole primary beneficiary of the account. Conduit trusts for the benefit of Will and Wendy's three children are the contingent beneficiaries. What are Wendy's options with regard to the 403(b)?

Blue Jazz, Inc., has 11 percent coupon bonds on the market that have 21 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 11.1 percent, the current price of the bond $_____Round it two decimial places, and do not include the $ sign, e.g., 935.67. Your
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Jackson just received a settlement in a lawsuit that promises two future payments of $ 2 9 0 , the first payment at the end of the 5 th year, and the second at the end of the 1 0 year. Jackson, being profligate, doesn't want to wait and instead wants instead to spend all of the settlement money today. What is the present value of his settlement

After completing their degree at UTRGV in 1992, Brian Mark, Finance Major and Steven James, IT major pursued their dream of launching computer games design company. Early 1993, the friends started preparing Stevens house garage to become the first location of their company, Digital Studios partnership. Throughout the years, Digital Studios passed

You are the lead project manager for an outdoor sporting goods distribution company called Elite Sports Distribution (ESD) that has annual sales totally $270 million annually. Your company has ambitious plans and has 3 major initiatives cited below. The C-level executives believe that our distribution process must be improved. Of these

An investor with a 4-year investment horizon purchases a bond that pays coupons annually at a rate of 7%. At the time of purchase, the bond has 10 years left to maturity and is selling at 93.2899 per hundred of par , with a YTM of 8%. Determine the bond's carrying value at the end of the investment horizon.

A certain 5% annual coupon rate convertible bond (maturing in 20 years) is convertible at the holder's option into 17 shares of common stock. The bond is currently trading at $790. The stock(which pays 56 a share in annual dividends) is currently priced in the market at $33.79 a share. QUESTIONS: HUGE THUMBS UP FOR CORRECT ANSWERS a. The bond's

The liquidity component of the CAMELS rating refers to Answer Regulators' concern about how a bank's earnings would change if economic conditions change. Excessive borrowing by banks from outside sources, such as the discount window A bank's sensitivity to financial market conditions. Monitoring the type of loans that are given, the bank's process

What is the covariance of the following investments? Year Investment A Investment B 1 12% 6% 2 7% 3% 3 9% 5% 4 -5% -1% Un 3% 1% 6 11% 5% 12.72 11.24 14.48 13.97
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Assume the rate of return given below are for two stocks listed on the Ghana Stock Exchange (GSE). Year Return on stock A Return on stock B 1 0.2 0.3 2 0.10 0.1 3 0.14 0.18 4 0.05 0.00 5 0.01 -0.08 Calculate the arithmetic average return on the two stocks over the 5-year period. Which of the two stocks has a greater dispersion around the mean?

5. Tabulate and draw the investment opportunity set of the two risky funds. Use investment proportions for the stock fund of zero to 100% in increments of 20%. 6. Draw a tangent from the risk-free rate to the opportunity set. What does your graph show for the expected return and standard deviation of the optimal portfolio?

A stock is expected to pay a dividend of $ 1 . 5 0 per share in three months and in six months. The stock price is currently $ 4 5 and the risk - free rate is 6 % per annum with continuous compounding for all maturities. An investor has just taken a short position in seven - month forward contract on the stock. 4 months later: Now, the price of

Find the equivalent taxable yield of the municipal bond for tax brackets of zero, 10%, 20%, and 30%, if it offers a yield of 4.30%. (Round your answers to 2 decimal places.) Tax Brackets a. Zero % b. 10% % c. 20% % d. 30% %

The yield to maturity on a three-year Treasury note is 5.0% and the yield to maturity on a three-year TIPS is 3.0%. What is the market s estimate of the annual inflation rate over the next three years? A. 0.70% B. 1.40% C. 1.70% D. 2.00% E. 0.90%
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You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner (leasing is a very common practice with expensive, high-tech equipment). The scanner costs $6,300,000, and it would be depreciated straight-line to zero over five years. Because of radiation contamination, it actually will be completely valueless in five
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Calculate the standard deviations for Roll and Ross by filling in the following table: (A negative value should be indica sign. Do not round intermediate calculations. Round your answers to 4 decimal places.)
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For an American investor, the expected rate of return on European securities depends on all of the following factors except the: Rate of return on equivalent American securities The current exchange rate between the dollar and the pound Exchange rate anticipated to prevail when the securities mature Interest rate paid on European securities
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(financial statement discussion) Prepare a couple of paragraphs which identify the four types of financial statements used in health care accounting/finance. What information is typically found on each of these financial statements? (income statement analysis) - Locate the income statement for the health care system, hospital or health insurance

The risk - free rate of return is 1 0 . 5 % , the expected rate of return on the market portfolio is 1 7 % , and the stock of Xyrong Corporation has a beta coefficient of 1 . 5 . Xyrong pays out 5 0 % of its earnings in dividends, and the latest earnings announced were $ 1 3 per share. Dividends were just paid and are expected to be paid annually.

At the end of 2 0 2 2 Victoria will receive a sum of money when one of her investments matures. Based on this we can deduce that Victoria has invested in which of these? Select one: IPO Preference share Ordinary share Debenture Dividend stream

You are considering an investment in Justus Corporation's stock, which is expected to pay a dividend of $ 2 . 5 0 a share at the end of the year ( D 1 = $ 2 . 5 0 ) and has a beta of 0 . 9 . The risk - free rate is 3 . 8 % , and the market risk premium is 6 % . Justus currently sells for $ 3 7 . 0 0 a share, and its dividend is expected to grow at
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If the discount rate is 10% per year, which of the two offers is worth more, $100 today, or $110 next year? $100 today is worth more. a. b. $110 next year is worth more. The two options are equal. C. d. Cannot be determined, we need more info
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Please provide only the sketch on the (sigm_v, mu_v) plane! Suppose there are n risky assets. Assume they are uncorrelated (i.e. Cij = Cov(Ki, K;) = 0 when i #j); each has the same mean return m. i.e. m1 = ... = Mn = m.),and the variances of their returns may be different let the variance of K, be o?). Answer the follow: Sketch the situation in
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q43 The Sinyphean Company has a bond outstanding with a face value of $5,000 that reaches maturity in 15 years. The band cared to the waited coupon rate for this bond is 84% and that the coupon payments are to be made semily Assuming the appropriate TM on the Sisyphean bond is 6.8%, then this bond wil trade at A. a premium B. a discount C par CD
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FloatSimon Corporation has daily cash receipts of $58,000. A recent analysis of its collections indicated that customers' payments were in the mail an average of 2 days. Once received, the payments are processed in 2 days. After payments are deposited, it takes an average of 1.5 days for these receipts to clear the banking system. a.How much

6. An analyst has gathered the following data about two projects, each with a 12% required rate of return. If the projects are mutually exclusive, the company should: A) reject both projects. B) accept Project Y and reject Project Z. C) reject Project Y and accept Project Z
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A fund manages a $ 2 0 b equity portfolio with a beta of 0 . 7 5 . If the S&P multiplier is $ 5 0 and index is currently at 2 , 5 0 0 , how many contracts should the fund sell to make its overall position market neutral? Why is the answer 1 2 0 , 0 0 0 ?

Four securities have the characteristics described in the following table: Stock A Stock B Stock C Stock D a 4% 8% 10% 6% B 2.2 1.5 0.5 0.8 ei 4% 8% 4% 2% Use the table and a Single Index Model for problems 14-17 to calculate the requested values for an equally weighted portfolio made up of the four assets, given an expected market return of 6%
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Based on the following information about Banks A and B, compute for each the return on assets (ROA), return on equity (ROE), and leverage ratio a. Bank A has net profit after taxes of $1.8 million and the following balance sheet: Bank Balance Sheet in millions Assets Liabilities Reserves Loans Securities $5 $70 $45 Deposits Borrowin Bank Capital
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Tim wants to buy an apartment that costs $750,000 with an 85% LTV mortgage. Tim got a 30 year, 3/1 ARM with an initial teaser rate of 3.75%. The reset margin on the loan is 300 basis points above 1 year CMT. There are no caps. The index was 1% at the time of origination. Tim also had to pay 3 points for this loan. Suppose the index rate will

Your company is considering a new project that will require $912,000 of new equipment at the start of the project. The equipment will have a depreciable life of 10 years and will be depreciated to a book value of $142,000 using straight-line depreciation. Neither bonus depreciation nor Section 179 expensing will be used. The cost of capital is 13
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Glenda purchases a house for $1,200,000. She makes a 20% down payment and finances the remainder through a 30- yr mortgage at an annual interest rate of 3.15%, compounded monthly (a). What is Glenda's monthly payment? (b) Assume that Glenda makes every payment for the life of the loan. Find her total payments? (c) How much interest does Glenda pay
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1. Net present value (NPV) Evaluating cash flows with the NPV method The net present value (NPV) rule is considered one of the most common and preferred criteria that generally lead to good investment decisions. Consider this case: Suppose Cold Goose Metal Works Inc. is evaluating a proposed capital budgeting project (project Alpha) that will
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(Related to Checkpoint 18.2) (Calculating the cost of short-term financing) The R. Morin Construction Company needs to borrow $90,000 to help finance the cost of a new $135,000 hydraulic crane used in the firm's commercial construction business. The crane will pay for itself in one year, and the firm is considering the following alternatives for
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Use the following information for the final 6 Questions "Jake is opening up a Donut Shop outside of Boone Pickens Stadium. He has to pay a Rights Fee (FC) of $10K per year to set up the Shop. He has to draw an Annual Salary (FC) of $30K. (These are the Fixed Costs (FC)). He can Sell each donut for $2.50. The Cost of donuts is $.50 (These are the
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A firm evaluates all of its projects by applying the NPV decision rule. A project under consideration has the following cash flows: What is the NPV for the project if the required return is 1 1 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e . g . , 3 2 . 1 6 . NPV At a required return of 1 1
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12-8: Payback Period Payback period Project costs $65,000, its expected cash inflows are $11,000 per year for 11 years, and its WACC is 10%. What is the project's payback? Round your answer to two decimal places. years
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Canadian Bacon Inc. financial statements are presented in the table below. Based on the information in the table, and using a 365-day year, calculate cash conversion cycle Round the answers to two decimal places Balance Sheet December 31, 2015 Cash and marketable securities $187,000 Accounts payable $217,000 Accounts receivable $498,000 Notes

All individuals can transfer gift tax free an amount up to the annual gift tax exclusion. True False QUESTION 55 A U.S. citizen can gift an unlimited amount to his non-U.S. citizen spouse. True False
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Outcome 3: Charting a Budget (HSMS 3.4.09) 11. Mrs. Kalbrisa budgets $125 a month for entertainment. She has allocated $10 for the movies and $25 for dining out. She constructs the following budget line graph to represent the situation, where x is the number of movies and y is the number of times she dines out in a month. Does the combination
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Pro forma balance sheet-Basic Leonard Industries wishes to prepare a pro forma balance sheet for next year. The firm expects sales to total $3,000,000. The following information has been gathered. (1) A minimum cash balance of $50,100 is desired. (2) Marketable securities will remain unchanged. (3) Accounts receivable represent 9.8% of sales. (4)
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Please help me solve the follo wing: (Present value) Sarah Wiggum would like to make a single investment and have $2 million at the time of her retirement in 35 years. She has found a mutual fund that will earn 4% annually. How much will Sarah have to invest today? What if Sarah were a finance major and learned how to earn a 14% annual return? How
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