1. Assume you had DJIA equals 3,028.44 on Monday 5th July, 2022.
The index divisor was 0.6135 and the total prices of shares of stocks included in the index was $1857.95. Assume that in the market there was only one artificial change, and that was a split of one stock of shares whose price was $132.20 into four-for-one.
(a) What would be the DJIA if the divisor was unadjusted.?
(b) Write the adjusted divisor for the index to be reported on Tuesday 6th July, 2022 (morning).
(c) Why do you think it is important to adjust the divisor?

2. You decide to purchase a new home and need a Gh¢100,000 mortgage. You take out a loan from the bank that has an interest rate of 7%. What is the yearly payment to the bank if you wish to pay off the loan in twenty years?

3. Find the price of a 10% coupon bond with a face value of GhC1000, at 12.25% yield to maturity, and eight years to maturity

4. What is the yield to maturity on a bond that has a price of Gh¢2,000 and pays Gh¢100 of interest annually, forever?

5. What is the yield to maturity on a one-year Gh¢1,000 Treasury bill with a current price of Gh¢900?

6. What is the real interest rate if the nominal interest rate is 8% and the expected inflation rate is 10% over the course of a year? What is the implication?

Answer rating: 100% (QA)

What would be the DJIA if the divisor was unadjusted The DJIA would be 302844 if the divisor was unadjusted The DJIA would be 302844 if the divisor was unadjusted To calculate this we need to find the ... View the full answer