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Your client, Jackie Brown, instructs you to invest her capital of $$500,000$ as follows. She

recommends to invest $$150,000$ into equities for two years, so she can use it as a down

payment for a single residence. Furthermore, she asks you to put $$350,000$ into Treasury

bonds, so it will be safe to use for her retirement. Jackie is $30$ years of age, and she is willing to

take substantial risk in her profile. Ms$.$ Brown makes $$125,000$ annually and wants to attain

capital appreciation. Elucidate on the prudence of the above recommendations.

$2.$ You have the following information. The treasury yield, unlevered beta, debt to equity and

tax rate are $\mathrm{.}03,1\mathrm{.}2,\mathrm{.}3/\mathrm{.}7$and $\mathrm{.}4.$ The stock gives $$2$ as a dividend. Find the levered bheta.

$3.$ A $5\%$ bond$$s interest is invested at $\mathrm{.}06$ annually. You bought it for $$800$ and you sell it for

$$9004$ years later. What is the annual rate of return you made?

$4.$ Compute the case of margin requirements and restrictions of an account. The initial price of

the stock is $$50,$ and we buy $1,000$ shares. After that, the price alters. The $3$ cases we experience

are the price drops to $$25,$ secondly it falls to $$45$ and thirdly it rises to $$60($note$,$ they are the

same as the ones I presented in class.$)$ Assume the initial margin requirement is $60\%$ and the

maintenance margin requirement is $25\%$