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Describe in words the hedging strategy that the company should take in each of these cases. Remember that a possible answer is that the company should not be hedging at all. a) A Japanese manu...
5. An investment requires 12,000 today, and produces the first cash flow of 500 in three years (year 3). Cash flow is expected to grow at 2.5% a year after year 3. a) What is the NPV of this inv...
12. There has been a rumor that Company Z may become a takeover target for another company in the industry, or even for a private equity fund in a leveraged buy-out (LBO). Here is the updated data on ...
11. Describe in words the hedging strategy that the company should take in each of these cases. Remember that a possible answer is that the company should not be hedging at all. (1 paragraph maximum f...
3. As a result of the COVID-19 crisis, company A has decided to sell its receivables to a bank in exchange for cash. What would be the likely effect of this financial decision on the company's curre...
Cash Flow For the Fiscal year period ending 12 months 12 months 12 months Dec-26-2018 Dec-25-2019 Dec-25-2020 Currency Million USD Million USD...
Company A is preparing a deal to acquire company B. One analyst estimated that the merger would produce 475 million dollars of annual cost savings, from operations, general and administrative expens...
Consider the following data - A machine costs $750 today (year 0). Assume this investment is fully tax-deductible, as stipulated by the new US corporate tax code of 2018. - This c...
. 6. Using one or more online sources, determine the annualized total return (i.e., including dividends reinvested), volatility (using monthly retruns), and Sharpe ratio of Berkshire Hathaway's Clas...
. 3. You are presented with the following information regarding Portfolios X, Y, and Z: E(r) beta Portfolio X 12% .25 1.6 Portfolio Y 8% .18 0.8 Portfolio Z 3% .00 0.0 Which of Portfolio X and Y wou...
. 3. You believe arbitrage price theory is a model for equity market returns. Your friend tells you she has found an investment manager who has consistently produced Jensen's alpha over the past t...
In Questions 12 through 15, you will work with data relevant to the computation of the yield curve. The most relevant data sources here will likely be: Data https://fred.stlouisfed.org/series/T10Y2Y 1...
George: (currently 41 years old, birthday is June 23rd): graduated in April 2000 and met Kevin's mother at their graduation ceremony, they married a year later; and started his own business upon gradu...
George is thinking that his TFSA investments are too conservative and wants to invest in XYZ Inc. as their stock is up 40%! If George invests all his TFSA money in XYZ Inc. and it continues to climb t...
Jessie's gross annual salary is $91,800. His employer has withheld monthly income taxes and other payroll deductions of $3,800. Jessie has monthly fixed expenses of $1,850, variable expenses of $1,400...
Triple A Company is a mid-sized California company that specializes in creating high-fashion clothing. The company executives want to understand financial options and its application in corporate fina...
You are a corporate treasurer and you would like to convert the exposure your firm has to a 10 year $100,000,000 bond issue it plans to make in the coming days to a floating rate. This bond will rep...
Subject : principles of finance As an investor, you expect the inflation rate to be 7% next year, to fall to 5% during the following year and then to remain at a rate of 3% thereafter. Assuming tha...
Debbie wants to know how much her cost of living will be in 18 years, based on a 2.85% annual rate of inflation. Her current cost of living is $56,200. $90,074.12 $33,889.02 $93,813.48 $93,199.51 H...
Bilibili Inc (BILI) is an internet gaming company in China. Bear Fitchel and his grandson, Bull Fitchel were discussing BILI's stock value. Bear doesn't understand why people like online gaming and so...
Dionex Corporation, a leader in the development and manufacture of ion chromatography systems (used to identify contaminants in electronic devices), reported earnings per share of $2.02 in 1993 and pa...
Moonlight Gas & Electric Inc. is undertaking a 50-year project that requires an initial investment of $100 million. The project provides no annual cash inflow for the first ten years, an annual ca...
Martingale Corporation is considering a project that requires an initial investment of $5,000 in Year 0. The project is also expected to have a "net cost" of $5,000 in Year 1. It will then provide a p...
Tempest Industries Inc. is considering a 13-year project that requires an initial investment of $50 million. The project provides no annual cash inflow for the first five years, an annual cash inflow ...
Egmont Corporation is considering the following project. Assume that the corporate tax rate is 21% and the firm's discount rate is 10%. Duration of the project: 7 years Initial investment:...
Pastoral Healthcare Inc. is considering the following project. Assume that the corporate tax rate is 21% and the firm's discount rate is 10%. Duration: 5 years Initial investment: $3 milli...
Remember that there has to be a negative number in your calculations for the formulas to work. If you get an error message on your calculator, go back, and make one of the dollar variables negative......
Project NPV* Better Mousetrap's research laboratories have developed a new trap. The project requires an initial investment in plant and equipment of $6 million. This investment will be depreciated st...
Which of the following is FALSE about non-bank financial institutions? Group of answer choices a.Some non-banks issue government-insured deposits. b.The major categories of U.S. non-banks includ...
SC is an oven manufacturer. It is evaluating a project to produce new ovens. The project has the following features: a. Initial investment in plant and equipment today is $2 million. b. First-year s...
CSC is an oven manufacturer. It is evaluating a project to produce new ovens. The project has the following features: a. Initial investment in plant and equipment today is $2 million. b. First-year ...
Ontel Inc expects an EPS of $10 and DPS (dividend per share) of $6 next year and expects to maintain the same payout ratio for the foreseeable future. It has an opportunity to invest its retained earn...
CSC is an oven manufacturer. It is evaluating a project to produce new ovens. The project has the following features: a. Initial investment in plant and equipment today is $2 million. b. First-year ...
Ontel Inc expects an EPS of $10 and DPS (dividend per share) of $6 next year and expects to maintain the same payout ratio for the foreseeable future. It has an opportunity to invest its retained earn...
Coca Cola (KO) price is $61/share. The company is expected to pay dividend of $1.7/share next year. (In reality, dividends are paid quarterly. In this question we will assume for simplicity that all...
In questions in Part 2, you will consider buying a house in Urbanxx, IL as well as how to fund this purchase using a mortgage. To answer this question, please consider Exhibit A below. You may also do...
Which ofthe following statements is true? 0 a. More than one of the options in this question are correct. 0 b. Money market arbitrage exists when international parity conditions do not hold. 0 c. None...
Leading and lagging is of value to MNCs because of O a. foreign exchange risk. O b. exchange and capital controls. O c. None of the options in this question are correct. 0 d. basis risk. 0 e. diverse ...
5. How large must transaction costs in the FX market be such that an arbitrage opportunity, given these spot rates, is no longer possible? USD1.351/GBP, EUR1.19/GBP USDO.88/EUR O a. 7.4933% per transa...
QUESTION : BELOW IS FROM Game Theory and Design Thinking please answer accordingly. You and one of your classmates of FIN207 are selected to play a game. In this game, both players would write down...
1. How many days (rounded to the nearest day) will it take for $1,950 to accumulate to $2,125 at 6.5% annual simple interest? 2. How many years will it take for an investment of $1,000 to grow to $1,5...
A fund manager is required to submit an investment proposal to the Investment Committee on the merits of investing in ABC Corp. As an investment analyst supporting the team, you have been asked to a...
Based on the most recent end-of-year "Performance and Condition Ratios" data from the FDIC website, answer the following: [0.4] Provide your BHC's return-on-equity (ROE) and return-on-assets (R...
Based on the evidence presented in the curriculum regarding the historical performance of the Credit Suisse Global Macro Index (CSGMI) between 2000 and 2014, which of the following conclusions is corr...
PT Keren Tbk. is planning to issue an eight-year maturity IDR 500,000,000,000 bond with a 10 percent annual coupon rate and paid semi-annually. The firm's finance officer considers that 12 percent...
You have collected returns on AnaDone Corporation (AD Corp.), a large, di-versified manufacturing firm, and the NYSE index for five years: Estimate the intercept (alpha) and slope (beta) of the reg...
Which of the following items is not a characteristic of a common stock? it gives the owner priority if the firm files for bankruptcy it represents ownership in the firm it represents a claim again...
Which of the following items is a characteristic of preferred stock? It represents a claim against future common dividends It gives the owner priority if the firm files for bankruptcy It can be used t...
You are investing $100 today in a savings account at your local bank. Which one of the following terms refers to the value of this investment one year from now? Principle Amounts Discounted value Pres...
Suppose a 10-year, 6% coupon bond is issued, and one year later similar bonds are issued paying 5.85% coupons. What will happen to the market value of the first bond? A. The first bond's value will ...
1. Sukuk issued based on musharakah or mudarabah contracts represent evidence of investors' capital contributions to the investment activity, and their rights to the cash flow from this activity. TRUE...
1. Sukuk holders essentially share the profits and risks of the business, instead of receiving a fixed ratio of the capital invested. TRUE /FALSE 2. The return for Sukuk is determined based on the ...
1. The issuance process of Sukuk excludes establishing a special purpose company to represent the Sukuk holders before commencing the issuance process. TRUE /FALSE 2. The relationship between Sukuk...
1. The primary parties in Sukuk contracts are the Sukuk issuer, Sukuk holders and Sukuk trader. TRUE / FALSE 2. Sukuk is structured using normal financial contracts similar to bonds. TRUE / FALSE ?...
1. Conventional investors are not comfortable with Sukuk due to its innovative Shariah structure and competitive returns. TRUE / FALSE 2. Sukuk can be used as a hedging utility to potentially manag...
Week 2 - Assignment Chapters 3 & 4 Instructions: Please select the correct answer. You need to EXPLAIN your answer and/or SHOW any applicable calculations to receive credit. 1. A good measure ...
Which of the following items reflects the time value of money? a. Real risk-free rate. b. Inflation premium. c. Default risk premium. d. ...
Koda's Manufacturing has a required return of 9.50%. If the market return is 13.0% and the nominal risk-free rate is 6.0%, what is Koda's beta? a. 0.5% b. 8.3% c. ...
Use the following data to answer questions 5 and 6. Assume the following premiums reflect current market conditions: r* = 3.15%; IP (1-year bonds) = 2.35%; IP (3-year bonds) = 2.65%; IP (5-year bonds)...
Instructions: Please select the correct answer. You need to EXPLAIN your answer and/or SHOW any applicable calculations. Koda's Manufacturing has a required return of 9.50%. If the market return is ...
Instructions: Please select the correct answer. You need to EXPLAIN your answer and/or SHOW any applicable calculations. The beta for ABM Industries is 1.50. Assuming that the nominal risk-free rate...
You are required to answer the following questions by showing relevant workings. a. Compute the value of a bond that matures in 20 years, makes an annual coupon payment of RM40, and has a par value of...
. Question 2 a. "By investing in different securities. an investor can lower hisr'her exposure to risk". Do you agree with this statement? Use your own words and example to support your ans...
BAFB 1013 final Q2. September 2021 Final Examination CONFIDENTIAL Question 2 Puan Duka Lara is going to invest her RM15,000 funds in one of three projects with the following information: Project Hitam...
BAFB 1013 final Q4. Principles of Finance (BAFB1013) September 2021 Final Examination CONFIDENTIAL Question 4 You are required to answer the following questions by showing relevant workings. a. You ar...
. Question 22 (2 points) Listen Speedy Service Inc. has an 8% coupon bond that matures in 11 years. The bond pays interest semi-annually. What is the market price of a $1,000 face value bond if t...
Hollow and Shout Inc. (H&S) manage a product with current sales of $1,000,000 per year. H&S are expecting sales to increase by 12 percent next year. What is the expected percentage change in t...
À l'occasion d'une rencontre avec votre conseiller financier au sujet de votre régime enregistré d'épargne-retraite (REER), celui-ci vous propose d'investir dans un certificat de placement à taux...
Bob Stevens has just inherited $175,838 which he would like to use as part of his retirement nest egg. He invested the funds at a 6.72 percent annual rate compounded annually. Bob will reach age sixty...
When a discounted cash flow (DCF) model is used to estimate the intrinsic value of a company, many decisions are made. What are two weaknesses of the DCF model? Provide two examples of an attribute, a...
Assume that the First National Bank has the balance sheet shown below, the income gap is currently -$17.5 million, and that interest rates are initially at 10%. First National Bank Assets Duration ...
Problem 2: (18 points) You are an analyst at FixInc Corp. whose task is to value a convertible bond of Allana Corp. that matures in 5 years. The bond has face value of $1000, annual coupon rate of 8% ...
For an investment ending at time T we denote the net cash flow at time t by c t and the net rate of cashflow per unit time by ρ(t) . The present time is t = 0 and time is measured in years. An infras...
For an investment ending at time T we denote the net cash flow at time t by c t and the net rate of cashflow per unit time by ρ(t) . The present time is t = 0 and time is measured i...
Consider a stock whose current price is $150 per share. You would like to value an American put option on this stock that matures in two years. Assume that the strike price for this put option is $170...
Problem 4: (29 points) Consider a stock whose current price is $150 per share. You would like to value an American put option on this stock that matures in two years. Assume that the strike price for ...
Problem 1: (12 points) You are expecting XYZ stock price to go down in next 3 months, however you are not completely sure. So you decide to use just one option, either European call or European put o...
Consider a two-year European call option on a non-dividend-paying stock of XYZ Corp. Suppose that XYZ stock price is $50, the risk-free interest rate is 5% per annum with continuous compounding and th...
Suppose that the stock price of XYZ corp. follows stochastic I to process with a drift rate of 15% per annum and a standard deviation rate of 30% per annum. The current stock price of XYZ corp. is $50...
A stock price is currently $150. It is known that at the end of the year it will be either $220 or $80. The risk-free rate of interest with continuous compounding is 5% per annum. The current value of...
2. Based on your calculations in Tab 2, Question 8, which offer should LGI accept for the Bowie plant? Explain why. Be sure to include the concepts of risk and potential return as part of your discuss...
30. Closing costs on the purchase of a house... **increase the amount of cash available down payment **reduce amount cash available down payment **are paid by the lender 33. The tax advantages of h...
23. Consumer purchase decisions should be directly related to your **financial goals. **aspirational lifestyle. **future standard of living. **personal feelings 24. What is normally referred to as ...
HW #6 A. Assume an individual makes a lump sum investment at the beginning of year one of $1,317. The expected return on this investment is $8,872 (after tax) to be received as a single amount at t...
Acme Co. is considering a four-year project that will require an initial investment of $9,000. The base-case cash flows for this project are projected to be $12,000 per year. The best-case cash flows ...
An electric utility company is in a stock-for-stock negotiation with an acquirer. The buyer's and target's share prices are currently trading at $35 and $20, respectively. The buyer is projected to ea...
The price of IBA stock is $101. It will either increase by $10.2 or decrease by $8.5 at the end of month 1. If the price is up in the first month, it will either increase by $16.1 or decrease by $21 a...
Avicorp has a $10.7 million debt issue outstanding, with a 6.1% coupon rate. The debt has semi-annual coupons, the next coupon is due in six months, and the debt matures in five years. It is ...
The market risk premium for FCIB is 9 percent, and has a tax rate of 35 percent. The risk-free rate of interest is 5%. Willow-Woods Inc. has a capital structure comprised of the following: 8,500...
Vitality Vancouver Inc. (VVI) has recently raised debt capital through long-term financing. The bond indenture includes issuing 8% coupon bonds on the market that are selling at $989, pay interest sem...
1. Diversification cannot reduce the portfolio risk if you invest different stocks in the same industry. . Diversification reduces the portfolio risk if you invest different stocks in the differe...
1) Tony's son, Mark will start college in 7 years. Tuition costs $23,000 today, increasing at an annual rate of 3.6%. Tony wants to earn 11.8% annually on his investments. If he makes an initial inves...
1)Ayeza thinks of investing $10,000 a year in real terms into her investment account for the next four years. The relevant nominal discount rate is 7.5% and the inflation rate is 4.2%. Calculate the r...
Armor Investment Company is considering the acquisition of a heavily depreciated building on 10 acres of land. It expects to rent the building as a storage facility and expects to collect cash flows e...
How do taxes influence the WACC? Does the WACC increase when taxes increase? What element on the balance sheet of companies is mainly affected by tax changes (either rising or falling)? Might rising t...
Explain what matters most historically when it comes to returns and current interest rates? Why does that influence stock returns? This discussion must include some discussion of the earnings yield of...
Elaborate on the difference between the P/E ratio and the EV/EBITA (or EV/EBIT) ratio. Discuss what matters most for equity owners and why (still) focusing on the P/E ratio might not provide a clear e...
When looking at company valuation compared to the bond market, how could varying interest rates influence your choice of buying (stable) stocks vs. bonds? Include in your discussion how changing inter...
Vitality Vancouver Inc. (VVI) has recently raised debt capital through long-term financing. The bond indenture includes issuing 8% coupon bonds on the market that are selling at $989, pay interest sem...
Which statement is not true regarding the Capital Market Line (CML)? a.The CML always has a positive slope. b.The CML is also called the security market line. c.The CML is the line from th...
Vitality Vancouver Inc. (VVI) has recently raised debt capital through long-term financing. The bond indenture includes issuing 8% coupon bonds on the market that are selling at $989, pay interest sem...
please help me answer this question. Suppose you are the owner of a company, which generates a free cash flow of $0.6 million per year in perpetuity. Suppose the current one-year risk-free interest ra...
please help me answer this question. Wolfcorp has a plant that can generate a cash flow of $3 million annually. Because of a new regulation that the government will announce shortly, the cash flow nex...
please help me answer this question. Bluestar, a U.S. company, is considering a new project in Japan. The following expected free cash flows measured in Japanese yen are assumed to be uncorrelated wit...
please help me answer this question. You founded your firm in 2019. In 2020, you sold 3 million shares to a venture capitalist, with a price of $11 per share. After this transaction, your company has ...
please help me answer this question. PointBiotech is considering starting a new project in Melbourne. The management team expects the following free cash flows from this new project. Year 0 1 2 3 4...
please help me answer this question. To extend PumpkinCorp's business to Melbourne, the manager of PumpkinCorp is considering acquiring RedCorp, a firm located in Melbourne. PumpkinCorp has 10 million...
please help me answer this question . The following is the balance sheet for Cavernetworks (in thousands of dollars): Assets Liabilities Cash $600 Debt $300 Property, Plant, and Equipment $3960 Equi...
Manning services floats a bond in the market a 6.5% coupon bond with annual payments. The bond stipulates that the yield to maturity is 6.71% and the maturity date is 7 years from today. Calculate the...
1. Manvester Steliing Inc. has a semiannual, 12-year bonds which is selling at par and have an effective annual yield of 4.6529%. What is the amount of each interest payment if the face value of the b...
finance56 finance this a is a complete question kindly solve showing all the working AT&T Mobility, LLC, will pay $60 million to settle litigation with the Federal Trade Commission over alleg...
. Suppose BSA Corporation projected to generate the following for the next five years, in million pesos: Operating Year Revenue Expense Taxes (excluding depreciation 50.00 30.00 6.00 2 65.00 33.00 6...
5) In the context of asset pricing, the finance literature implies that an investor will be indifferent between two bonds which shows equal yields to maturity if they are of similar default risk. What...
1)Ayeza thinks of investing $10,000 a year in real terms into her investment account for the next four years. The relevant nominal discount rate is 7.5% and the inflation rate is 4.2%. Calculate the r...
finance56 finance this a is a complete question kindly solve showing all the working AT&T Mobility, LLC, will pay $60 million to settle litigation with the Federal Trade Commission over alleg...
. Use the following information for numbers 17 to 22: Compute for the missing figures using CAPM: C Corp A Corp P Corp M Corp Risk free rate 17. ? 3% 4% 5% Beta 1.25 18. ? 1.30 1.40 Market return 12...
An investor is considering the purchase of a small office building. The NOI is expected to be the following: Year 1, $232,000; Year 2, $242,000; Year 3, $252,000; Year 4, $262,000; Year 5, $272,000. T...
A stock is trading at $50, an at-the-money put with 3 months to expiration is trading at $3, and the present value of the exercise price is $49. What is the value of a fiduciary call position with t...
A call is worth $9, the continuously compounded risk-free rate is 5%, the futures price is $95, the exercise price is $100, and the expiration is 9 months. Based on these data, the arbitrage-free pric...
In 90 days, a company will have to borrow $5 million for 180 days and they are concerned that interest rates may rise leading to increased interest expense. They decide to hedge with a 3 x 9 FRA. Cu...
If the spot exchange rate on the Hong Kong dollar (HKD) in Japanese yen (JPY) is 14 JPY/HKD (JPY per 1 HKD). The Hong King risk free rate is 0.75% and the Japanese risk-free rate is 0.50%. What is the...
You enter a 2-year pay-fixed receive-floating interest rate swap with semi-annual payments on a notional principal of $20 million and the current term structure of interest rates is below based on a 3...
businesss questions Case study based Individual coursework to meet learning outcomes LO2 and LO3 The following case study will give students the opportunity to examine the range of potential threats, ...
MULTIPLE CHOICE Q HELP Pinder Ltd is considering buying the patent rights to a recently developed drug to treat eczema for $30.0 million. There is only 2 years left on the life of the patent, after ...
Pinder Ltd currently has 5 million shares outstanding that are trading at $18 per share. Due to some unforeseen problems, Pinder Ltd needs quick access to capital and decides to raise $1 million placi...
(MULTIPLE CHOICE, 1 ANSWER) Prior to TD 2004/22, Pinder Ltd announces an off-market buyback to its shareholders at $15 per share. Of the $15, $10 was a fully franked dividend and the capital component...
(MULTIPLE CHOICE, 1 ANSWER) Pinder Ltd is considering buying the patent rights to a recently developed drug to treat eczema for $30.0 million. There is only 2 years left on the life of the patent, aft...
Pinder Ltd is considering building a solar power plant. The solar power plant will cost $10.3 million immediately, and will take 1 year to build. If there is high demand for electricity, the solar pow...
In a free floating exchange rate regime, the demand and supply for a currency determine its price. For each of the following conditions, explain what is expected to happen to the demand and supply cur...
our company needs to borrow $5 million in three months' time for a period of 6 months (180 days). You are concerned that the changes in interest rates will be unfavourable. You approach an FRA dealer,...
Company AA and company BB each need $1 million in funds and are quoted the following rates in the fixed and floating markets. AA agrees to borrow at the fixed-rate and BB agrees to borrow at the float...
Company AA and company BB each need $1 million in funds and are quoted the following rates in the fixed and floating markets. AA agrees to borrow at the fixed-rate and BB agrees to borrow at the float...
Your company needs to borrow $5 million in three months' time for a period of 6 months (180 days). You are concerned that the changes in interest rates will be unfavourable. You approach an FRA dealer...
Deposit taking institutions are subject to capital adequacy standards imposed by APRA (Australian Prudential Regulation Authority). Required: a) Explain the purpose of the capital adequacy requir...
Your company needs to borrow $5 million in three months' time for a period of 6 months (180 days). You are concerned that the changes in interest rates will be unfavourable. You approach an FRA dealer...
Company AA and company BB each need $1 million in funds and are quoted the following rates in the fixed and floating markets. AA agrees to borrow at the fixed-rate and BB agrees to borrow at the float...
Suppose you evaluating an investment manager. Manager A has achieved a historical return of 20% per year with a beta (with respect to a benchmark) of 1.4, and volatility of 40%. Manager B has achi...
Monetary Policy Statement On 20 January 2006, at its first meeting for the year 2006, Bank Negara Malaysia's Monetary Policy Committee (MPC) decided to leave the Overnight Policy Rate (OPR) unchanged ...
Question 4 The price of IBA stock is $101. It will either increase by $10.2 or decrease by $8.5 at the end of month 1. If the price is up in the first month, it will either increase by $16.1 or decrea...
Round to 4 decimal places Question 1 GoGo Inc. plans to issue a perpetual callable bond that pays 11.4% annual coupons. The current interest rate is 8%. Two years later, there is 15% probability tha...
A conceptual difference between the Black-Scholes-Merton model and the binomial model is that the former is based on replication whereas the latter is based on risk neutral valuation. Ture or False, P...
A car dealership offers your client no money down on a new car. Your client may pay for the car for 3 years by equal monthly end-of-the-month payments of $376 each, with the first payment to be made o...
Question 1 (20 marks) One of the fixed-income portfolio managers is considering purchasing a three-year 6% annual coupon paying bond. Please use this information to answer parts A and B. a. Usin...
16. Please refer to the following screen shot. Kyle is modeling potential umbrella sales in his store in the next 10 days. He believes sales would be 100 umbrellas if it is a rainy day, and only 30 if...
Question 2 (from 2010 session 1 Exam) [10 marks] A 6 month European call option on a share in ABC Ltd has an exercise price of $20. The current share price for ABC Ltd is $18.50. After 6 months, the s...
1. Aegean Cruises issues only common stock and coupon bonds. It has a debt-equity ratio of 2. The cost of the equity is 14% while the pretax cost of debt is 6.5%. What is the WACC of Aegean if its tax...
Five years ago, Sportify Inc. issued a 20-year bond with an annual coupon rate of 12% to finance its $60 million oversea expansion (assume coupons are paid annually in this question). Because of the d...
I work for firm XYZ situated in Britain, and my boss has become concerned about the current economic environment, especially as it is related to the different types of exposures that my firm may face ...
Due to the adoption of a just in time assembly line system, NWC is expected to decrease. Inventory is expected to decrease from $254600 to $170144 while accounts payable will also decrease by $31880. ...
You have three stocks in your portfolio with the following properties: Stock Portfolio Weight Expected Return Variance Correlation With A Correlation With B Correlation With C A 20 percent 5 percen...
True or False - A breakout occurs when a stock's price moves up quickly above a former support line? True False True or False - Technical Analysis is for day trading? True False What do...
Two years ago, Sanjay purchased 2,500 units in a Canadian start-up company called Here We Go Inc. for $15,000. On October 22, 2021, he sold 1,250 shares when they hit $18.50/share and incurred a large...
MBC Inc. just paid a dividend of $8.00 per share but plans to pay $2.00 per share every quarter from the next quarter up till the last quarter of year 7, after which the dividends will be paid $2.50...
The term "Derivative" means that the price of a derivative contract is derived from the price of the commodity or financial instrument in the physical market. Select one: True False In the ...
Which of the following factors is true when considering a 48-month loan at 6% APR and a 36-month loan at 5% APR? You will pay less in total for the longer-term loan. You will pay less interest for ...
You get a mortgage loan on May 4 and are required to deposit $855 into the escrow account at that time. Your first payment is due June 1, in the amount of $1,844.23 ($1,644.23 PI + $200 TI). The lende...
1)Harrison invests $10,000 in an account that pays 5% simple interest. How much more could he have earned over a 7-year period if the interest had compounded annually? Which one is likely to be used ...
Paul is planning a four-week trip to Europe and is deciding what type of health care coverage he may require in addition to his basic provincial health plan. He has compiled the following list of cons...
Nelly purchased a 10-year guaranteed renewable term life insurance policy in 2000, with a face amount of $500,000. Her initial premium was set at $1,000 annually. When Nelly's policy renews after the ...
With regards to group life insurance, which of the following statements are true? 1. An individual employee does not typically have the freedom to select a specific amount of insurance coverage, but r...
Megan owns a universal life (UL) policy with guaranteed mortality rates. The illustration provided indicates that, if she continues paying her planned premiums for 20 years, and if the returns are at ...
Sixty-six-year-old John, a widower, wants to purchase insurance that will cover the tax consequences of any capital gain that arises from his non-registered investment portfolio and his real estate ho...
Ken and Amanda, a married couple who are both age 56, each own a 10-year term life insurance policy that is convertible up to age 70. The policies were purchased in 1990 when their three children were...
en years ago, John purchased a universal life insurance policy that has a face value of $1,000,000 and a current cash surrender value of $22,000. There is currently no policy loan outstanding. The ann...
How much life insurance is required for a family whose primary wage earner currently has a term policy with a death benefit of $200,000? The annual ongoing income requirement for the family is $50,000...
Fiona is considering a career in the insurance industry in Canada. Which of the following statements about the industry is not true ? A. An underwriter assesses risk and an actuary prices risk ...
Tom's house was destroyed by a fire, which the fire department believe was caused by a candle left unattended in the kitchen. The peril in this case is the: A. The house B. Tom's absence ?...
A superfund manager currently manages a diversified Australian shares portfolio with a value of $300 million. The manager decides to use the ASX SPI 200 index futures to hedge a forecasted decline in ...
A company based in U.S. is expected to make a payment to a client in 3 months in the amount of 1,000,000 euros. To do so, it plans to acquire euros in 3 months on the spot market. Current exchange rat...
Problem 3: You are an arbitrageur working for Century Arb hedge fund. At 10:30 AM you are observing the following prices/rates. A European put option of XYZ Corp. maturing in 3 months with the strike ...
Cheryl is very interested in learning about the flexibility of the various non-qualified benefits she is receiving, especially after being severely limited in how much she could contribute to her reti...
Code Consulting offers an "Excess SERP". What would be the unique feature in the design of this plan? A. Will allow for deferral of compensation in excess of an employee-established base level ?...
QUESTION 46 Which of the following types of funds would be most appropriate as an investment option for an employer-sponsored defined contribution plan with participant-directed investments? Divers...
QUESTION 35 The Coldest Brew coffee company established a non-qualified deferred compensation plan several years ago. Each year, three top executives defer a portion of compensation to the plan. In...
QUESTION 32 A recently retired 65-year-old client has requested to withdraw $10,000 from his only traditional IRA account. The account, which currently has a balance of $500,000, was funded in part...
QUESTION 26 Which of the following types of insurance should be addressed in a comprehensive retirement plan: A. Umbrella liability insurance B. Health insurance C. Disability ins...
QUESTION 19 You are designing a benefits package for a top-level executive and are seeking additional ways of providing tax-deferred benefits. Which of the following benefits would meet this need? ...
47) Todd expresses a concern at one point in the conversation that if he makes a substantial employer contribution, his younger employees may simply withdraw the money immediately. What possible measu...
46) In considering a 401(k) plan, which of the following statements regarding a plan for the Prudential Roofing Co. is NOT correct? If Prudential wants employees to save for their own retirement, the ...
45) If Cliff Jordon and Bill Reese want to install a plan that provides maximum benefit for themselves with the most modest contributions for other employees, which of the following plans would work b...
43) Which one of the following statements support the decision to select a Target Benefit Plan for Prudential Corp.? A. Annual contributions are flexible and there is no commitment for any annual c...
QUESTION 42 Richard, age 55, is a client of yours who is looking for a new job. He is very interested in finding a company that offers a retirement plan and would like to know which type of plan wo...
QUESTION 33 Joe Paulo has decided to retire at his full retirement age. His monthly benefit will be $1,612. He married later in life, starting his family at age 52. Joe's wife, Donna is 58. They ha...
QUESTION 32 Which of the following constitutes a welfare benefit plan covered by ERISA regulations? A. Benefits provided in the event of sickness, accident, or disability B. Unemploymen...
QUESTION 31 All of the following are correct statements concerning the Cash Reserve Account strategy EXCEPT: A. The amount of the case reserve should be equivalent to 1-3 years of required an...
QUESTION 30 All of the following types of executive loans are exempt from below-market rate loan tax treatment EXCEPT: A. Loans with no significant tax effect on lender or borrower B. L...
QUESTION 24 Which of the following topics should be discussed with a younger client just beginning to save for retirement? Purchasing long term care insurance Reviewing health insurance coverage Co...
QUESTION 22 Which of the following is NOT an ERISA provision from which a properly designed non-qualified deferred compensation plan may be exempt? A. Coverage requirements B. Required ...
All of the following would be considered highly compensated employees in in 2021 EXCEPT: A. Margaret, a six percent owner with annual compensation of $125,000 B. Ben, an employee with annu...
QUESTION 19 Qualified accounts being left to named beneficiaries may be subject to which of the following taxes? State Estate Tax State Income Tax Federal Income Tax Federal Estate Tax A. II ...
QUESTION 18 When and how is an employee taxed on the bargain element of a non-qualified stock option: A. Capital gains at time of vest B. Ordinary income at time of vest C. Capita...
Which of the following are characteristic of a defined contribution plan? Investment risk in defined contribution plans need not be assumed by the business Employer contributions, employee contributio...
A junior planner working for you is preparing cash flow projections for a senior HR manager earning $160,000 per year in W-2 income. Your junior planner shows a draft projection listing FICA taxes for...
Lori followed your advice and delayed receipt of Social Security retirement benefits to age 70, increasing her benefit amount from her FRA benefit of $1,850 per month to $2,442 per month. Her husband,...
Under which of the following conditions will an employee be able to exclude the value of key employee life insurance from his or her taxable income? A. When the employee does not own shares of stoc...
1. Jana just found out that she is going to receive an end-of-year bonus of $61,600. She is in the 35 percent marginal tax bracket. Calculate her income tax on this bonus. Now assume that instead of r...
28) Calculate the operating cash flow for Corrections Corporation of America. (Assume that depreciation is tax deductible.) Corrections Corporation of America Income Statement ($000's) Revenue $1,5...
Courses > Financial Management II - Fall 2021 (BU393) > Intro homework Chapter 17.1, 17.2 & 17.3 Full Screen Accessibility Analysts expect Evergro Inc. to generate free cash flow of $160 mil...
Accessibility Use the information in the table to calculate the change in net working capital for Wayne Enterprises in Year 2. Selected Financial Information Wayne Enterprises ($000s) Year 1 Year 2 Ca...
What is the ratio of growth CAPEX to the change in sales for The Lone Star Brewing Co. in Year 3? Lone Star Brewing Co. Selected Financial Information Year 2 Year 3 Revenue $61,709,316 $69, 114,434 De...
La Full Screen Accessibility What is maintenance CAPEX for The Lone Star Brewing Co. in Year 4? The depreciation rate is 12. 16%. Lone Star Brewing Co. Selected Financial Information Year 3 Year 4 Rev...
57 Full Screen Accessibility Tinney & Smyth Inc. is considering the purchase of a new batch polymer-bonding machine for producing Crazy Rubber, a new children's toy. The machine will increase EBIT...
Full Screen Accessibility Bill Sharpe, owner of Sharper Knives Inc., is closing his business at the end of the current fiscal year. His sole asset, the knife- sharpening machine, is four years old. Th...
Full Screen Accessibility The Sopwith Aviation Company is considering building a new short-range commuter jet, code named 'Sky Streak.' The aircraft's engines will be powered by a new green energy sou...
Assume an investment costing $24,869 will earn $10,000 a year for 10 years. If the discount rate is 10%, what is the discounted payback period of the project? (Include 1 decimal place, and round to th...
What single payment today would replace a payment stream of $50,000 that will be paid today, again at the end of year 1, and again at the end of year 2, if money earns 4% compounded semi-annually? Sel...
How much more would an investment of $5000 be worth after 5 years if it was earning 10% compounded semi-annually instead of 10% compounded annually? Select one: a. $93.92 b. $90.92 c. $91.92 d. $92.92...
What nominal interest rate compounded quarterly would place investors in exactly the same financial position as 6.55% compounded annuallly? Select one: a. 6.71% b. 6.66% c. 6.39% d. 6.70% e. 6.44% ...
Zack shopped around for a good interest rate to invest the prize amount that he received from an inter-college tennis competition. He narrowed down his search to two banks: Bank A was offering him 6% ...
Romba, a smart money lender, offers personal loans at an interest rate of 6% compounded annually. How much money did she lend Martha 3 years ago, if Martha owes her $45,450 today? Select one: a. $33,2...
1. Mercer Inc. reported $620 in dividends and $649 in interest expense. There is an increase of retained earnings by $404 and net new equity is $850. The tax rate is 34 percent. Revenues are $7100 and...
Please answer each question in 2 or more paragraphs: 1.4 What do you need to establish to analyse cash flow trends? 1.5 Explain the requirements for each of the following: Goods and Services Tax...
The table below provides selected financial data for the Vogon Construction Co. in Years t and H. Selected Financial Information Vogon Construction Co. Year t-1 Year t Interest Expense 49,732 151,737 ...
Builtrite stock is currently selling for $70 a share. You purchase 100 shares using 60% margin and later the stock is selling for $52 a share. What stock price would trigger a margin call (using 2...
a) Bharti Airtel plans to expand its network and prepare for the launch of 5G services. The board hadapproved raising up to ₹21,000 crore by issuing additional ordinary shares to its existing shareh...
Question 9 (1 paint) Which of the following are true? value of a firm is the difference between the value of the firm's four of the firm's debt se value of a firm is the sum of the value of the firm's...
Question # (1 point) Which of the following are true? law firm a's stock has a higher price to earnings (P/E) ratio than firm B's stock and have the same required rate of return. then firm A has highe...
-2344.11 Like Lew Attempt 1 Question 7 (1 point) A stock is expected to pay a $5 dividend 1 year from now, a $6 dividend 2 years and a $7 dividend 3 years from now. Starting with the dividend to be pa...
A firm is considering a project that costs $165,000 to start and generates $28,000/year in after-tax cash for the next 8 years. After 8 years there are no additional cash flows or salvage value. The f...
Intertrobe common stock paid dividends of $3.53 per share over the most recent 12 months. The consensus expected growth rate of dividends among investment analysts is 2% per year. If the discount ra...
Your client wishes you to investigate a biotechnology company with the following balance sheet and details (below): Notes: The company's bank has advised that the interest rate on any new debt finan...
You are a financial planner, and your clients are Samantha (age 64) and Luther (age 69) Vanderbilt who reside in Georgia. Both are in excellent health. They have two children, Vladimir (age 30) and Vi...
We are Bechtel, a private US construction firm. We bid to develop the airport and the surrounding area for Thailand. We are not sure whether the Thai transportation authorities will grant us the busin...
"Herry is planning to purchase a Treasury bond with a coupon rate of 2.05% and face value of $100. The maturity date of the bond is 15 March 2033. If Henry purchased this bond on 3 March 2020, w...
ABC borrows $13,244 at a subsidized rate of 3.6% to invest in a project. The project lasts for 10 years and ABC repays the loan at the end of the project. If ABC's cost of debt is 6.8% and the tax rat...
Henry is planning to purchase a Treasury bond with a coupon rate of 2.05% and face value of $100. The maturity date of the bond is 15 March 2033. (a) If Henry purchased this bond on 3 March 2020, wh...
Henry is planning to purchase a Treasury bond with a coupon rate of 2.05% and face value of $100. The maturity date of the bond is 15 March 2033. (a) If Henry purchased this bond on 3 March 2020, wh...
On 18 December 2019, Japfa Limited, an industrial agri-food company listed on the Singapore Exchange (SGX) announced a proposal to raise funds via a rights issue. The stock closed at $0.575 that day, ...
Suppose that you have a portfolio comprised of just two stocks (stock A and stock B). 15% of your money is in Stock A and 85% is in Stock B. Calculate the number that is closest to the standard devi...
Question 2 - Problem Solving (10 marks) Harold and Gracie are the directors of FinanceYou Ltd, a company that specializes in helping small businesses get set up and off their feet. The company was set...
Question 1 - Short essay question (10 marks) Compare and contrast the shareholder theory and the stakeholder theory. Discuss which theory you agree with more and why. Give examples to support your dis...
Which feature do Exchange-Trade Funds (ETFs) have in common with mutual funds? They can be traded at any time They are tied to an index One investment purchases a group of assets They are ...
True or False - A company's price just increased 50% overnight. It is definitely in a Mania TRUE FALSE True or False - After a mania, there is always a crash that brings the stock's price back d...
If you have two stocks, one gaining value and the other losing, what should your first reaction be? Sell the winner to lock in profit, hold the loser until it regains value Sell the loser and...
Any assistance would be appreciated for questions below If you currently own a stock, the ____ is the price you would be willing to sell it for Bid Ask Equilibrium IPO What is "Total De...
1)If the inflation rates in the British pound and the US $ are 4% and 1% respectively, while the exchange rate is 1 pound exchanges for $2, what will the future spot rate be? 2) What is the meaning of...
Question 2 You would like to purchase a private condominium that costs $1.2 million, and you are shopping around for a housing loan. As this is your first housing loan, the Monetary Authority of Si...
Question 1 (1 point) A stock generated returns of -18%. 42%, .3%, 22%%. and 5% cret the must 5 years. What are the arithmetic mean return and geometric mean return per year of this stock over the past...
A stock trades for $47 per share. A call option on that stock has a strike price of $50 and an expiration date twelve months in the future. The volatility of the stock's returns is 36%, and t...
Question: To visualise the client's net worth, develop a pie chart of the current asset allocation. This can be used as a basis for discussion about the client's risk tolerance and asset allocation ...
Share Statistics Avg Vol (3 month) 3 13.13M Avg Vol (10 day) 3 12.18M Shares Outstanding S 589.87M Float 587.78M % Held by Insiders ] 0.25% % Held by Institutions 1 76.34% Shares Short (Sep 15, 2020) ...
Assume an investor buys a share of stock for $80 at t=0 and at the end of the next year (t=1), he buys an additional share for $70. At the end of Year 2, the investor sells both shares for $85 each. A...
We have the following information. The spot exchange rates now and expected in a year from now between the South African rand and the Mali West African franc (CFA) is .02 and .025 S. A. rand per CF...
Calculate the operating cash flow for Wayne Enterprises.. Calculate the operating cash flow for Wayne Enterprises. (Assume that depreciation is tax deductible.) Wayne Enterprises Income Statement ($00...
You would like to purchase a private condominium that costs $1.2 million, and you are shopping around for a housing loan. As this is your first housing loan, the Monetary Authority of Singapore (MAS) ...
Zax decides to go through with setting up this repair and support service. However, it turns out that some of his estimates above were not accurate: The estimated startup cost of $29,000 was correct. ...
Now Bob knows that he will have $2,163,101 in his inheritance fund, when he will reach age sixty-five. He would like to know how much he could withdraw from the fund in equal installments at the end o...
Adisa and Amara are both over the age of 60 and have been married for the past 30 years. Adisa has contributed to the Canada Pension Plan (CPP) during his entire contributory period (38 years) and has...
A family friend of yours calls you up asking for financial advice. She works for Boing (a local aircraft manufacturer) and is offered, as an employee benefit, an opportunity to spend $10,000 to buy c...
2. A family friend of yours calls you up asking for financial advice. She works for Boing (a local aircraft manufacturer) and is offered, as an employee benefit, an opportunity to spen...
Call options and put options are written on Qantas. If the interest rate decreases, how are the prices of Qantas options affected? Qantas call options will decrease or increase? while Qantas put optio...
A European put option has 6 months to expiry and a strike price of $30. The underlying stock has a current price of $32. The riskfree rate of interest is 5% per annum. A European call option is writte...
BUSINESS ANALYSIS AND VALUATION MCQ Q1. Q2. Q3. Q4. Q5.. If Sales were $8,000,000 and $10,000,000 in 2019 and 2020 respectively, ATO was 4 and 2.5 in 2019 and 2020 respectively, NFOs were $400,000 and...
MCQ ON BUSINESS ANALYSIS AND VALUATION. Valuing mining firms using the ROV model is better than valuing these firms using the DCF or NPV models because: O a. The DCF model understates the calculated v...
QUESTIONS ON BUSINESS ANALYSIS AND VALUATION Q1. Q2. Q3. Q4. Q5.. Which of the following models is the easiest to use if the market is efficient and financial assets and liabilities are reported at fa...
questions on business valuation q1 q2 q3 q4 q5. Resource firms differ from other industrial firms in the following area(s): O a. have a greater stock price volatility especially in the short run O b. ...
1) As a student you should file your tax returns for several reasons. Which one is incorrect? a) As a resident outside of Quebec, you may be eligible for a refundable Goods and Servi...
Tom graduated in civil engineering from Alabama University two years ago and decided to work in the remote area of northern Alabama. He is making great money and saving it all. What is Tom's marginal ...
Laurie has been working full-time since graduating from Concordia's JMSB in December 2019. She is a resident of Quebec and is looking to make her first Registered Retirement Savings Plan (RRSP's) co...
1) As a new, full-time employee, Jenny has just become eligible to participate in Google's retirement plan. Google matches her contributions dollar for dollar! The plan averages an annual ret...
1) Linda is a student at Alabama University and does not have any loans. She is just now learning about credit scores and has recently found out that lenders commonly assess the credit paymen...
Net present value calculation) Big Steve's, makers of swizzle sticks, is considering the purchase of a new plastic stamping machine. This investment requires an initial outlay of ...
Advantages of a final pay defined benefit plan include which of the following? I. The employee's initial benefit ke...
Advantages of a defined benefit plan include which of the following? I. Benefits for employees who terminate employ...
Which of the following is a type of benefit formula used in a defined benefit pension plans? A. Flat service formula. B. Percentage per year of service formula. C. Unified d...
Rod Block and Brett Allisier are bond traders at a large fixed-income investment firm. Both Block and Allisier have developed bond valuation models for bonds with embedded options. Using their respect...
Assume an individual makes a lump sum investment at the beginning of year one of $2,123. The expected return on this investment received at the end of year 8 is $4,398. What is the IRR of the investme...
Assume a corporation has just paid a dividend of $ 4.35 per share. The dividend is expected to grow at a rate of 3.8% per year forever, and the discount rate is 9.1%. What should be the amount paid as...
An Indian company had taken a long-term loan in JPY at 0.10%. Repayment scheduled after six months. Indian company is planning to pay this JPY loan from its USD account. USD/JPY is current quoted in s...
After studying Iris Hamson's credit analysis, George Davies is considering whether he can increase the holding period return on Yucatan Resort's excess cash holdings (which are held in pesos) by inves...
A rise in the index of Leading Economic Indicators can be a predictor of all EXCEPT: Question 5 options: Rising interest rates Rising stock market Expanding economy More favorable mortgage rates in...
The following situations test your comprehension of time value of money concepts. You will need your financial calculator or Excel . For each problem write the variable from the problem next to the va...
Can someone explain this to me in detail? Bangkok Instruments, Ltd., the Thai subsidiary of a U.S.corporation, is a seismic instrument manufacturer. Bangkok Instruments manufactures the instrume...
You are provided with income statements (I/S) and balance sheets (B/S) for your company for the three most recent fiscal years. You are able to calculate, from these statements, I/S line items as a pe...
Can someone explain this to me in detail? Bangkok Instruments, Ltd., the Thai subsidiary of a U.S.corporation, is a seismic instrument manufacturer. Bangkok Instruments manufactures the instrume...
Can someone help explain this? An essay question was posed asking- We fear a revaluation of the currency of our affiliate the S. African rand. 1) How do i explain how we should hedge our translation ...
Can someone explain this to me in detail? Bangkok Instruments, Ltd., the Thai subsidiary of a U.S.corporation, is a seismic instrument manufacturer. Bangkok Instruments manufactures the instrume...
The American Opportunity Credit is characterized by all of the following EXCEPT: Question 5 options: a. The maximum annual credit amount is $2,500 per student in 2015 b. There is no requirement that t...
Michelle, a sophomore at the local university at the beginning of 2015, paid $3,000 towards her tuition from her own savings. Her parents will not claim her as a dependent on their 2015 tax return, bu...
Chad obtained a student loan of $8,000 to pay for his college expenses. He paid $5,000 for tuition and the rest for his room and board. On the federal income tax return, he may deduct the interest onl...
Jodie's grandparents contributed $150,000 to a 529 plan for her benefit in 2015. If they choose the split gift option, they may exclude $140,000 for gift tax purposes this year, and only $10,000 will ...
Simplified College Cost Worksheet Calculate approximate monthly amount to invest at the beginning of the period . Round the final answer to two decimals. Please note that intermediate steps should...
Mark and Jane spent $10,000 each for the tuition expenses of their 3 children in college. They can claim a Lifetime Learning Credit for $30,000 of combined educational expenses. Not sure if this is tr...
According to the article below answer the following question: Explain one (1) plausible benefit that Myanmar obtain from the investment made by Sumitomo. How about the investment made by and Toyota? ...
Explain the International Fisher effect and Interest Rate Parity. If these parity exists, explain the justification for MNCs to invest excess cash in foreign country. Provide examples in which situati...
According to the article below answer the following question: Explain two (2) plausible motives for Daiwa Securities to establish a subsidiary in Myanmar. [10 marks] Article: Myanmar coup fails to de...
According to the article below answer the following question: Explain the two (2) possible reasons for Kirin to engage in a joint venture when investing directly in Myanmar. [5 marks] Article: Myanma...
According to the article below answer the following question: The news article mentions three factors that explain ringgit's appreciation against the U.S. dollar namely, the weaker U.S. dollar, the hi...
NAB.AX is trading at $26 with a volatility of 25 percent. Consider a call option on this stock with an exercise price of $26 and an expiration in 90 days. The risk-free rate is 1.5 percent. Assume the...
Gail has purchased a life insurance policy on her husband Phil's life. The policy will pay a lump sum benefit to her daughter, Bonita, when Phil passes away. If Gail passes away prior to Phil, the own...
Jimmy was self-employed but is now retired. The government benefits that Jimmy receives form the majority of his modest income. Which of the following benefits that Jimmy receives is non-taxable and i...
Benny applies and is approved for a whole life insurance policy through Grateful Life Insurance company. One week after paying his first premium and taking delivery of the policy, Benny decides that h...
When completing the application for his life insurance policy with his agent, Blarney accidentally provides the wrong year of birth on the application. Three years later, the agent and the insurer dis...
Camilla uses email to communicate with clients and often sends out marketing material to her existing clients and prospects. Which of the following statements about the legislation that governs Camill...
Malena meets with you to discuss her insurance and estate plans. She has been married to Alberto for 10 years, but is considering divorce. Both Malena and Alberto had their wills drawn up 5 years ago,...
Blythe is an insurance agent and her new client, Xavier, wants to purchase a deferred annuity within his registered retirement savings plan (RRSP). The principal amount deposited to the annuity is $75...
Norm purchased an accidental death and dismemberment (AD&D) policy through Brightlight Insurance Co. Norm named his son Matthew as the beneficiary of the policy. As a result of an accident, Norm l...
Consider two investors: Investor-1 (henceforth Inv-1) and Investor-2 (henceforth Inv-2). Risk-free rate for Inv-1 is 5%. Return on risky portfolio is 12%. Inv-1 invests $20,000 in risk-free asset and ...
What is the difference between a swap and a forward contract? A. The size of a forward contract is often greater than that of a swap B. A forward contract is one-time transaction. A swap involves a se...
NOTE: Please refer to the terms Code and Standards in this section refers to the CFA Institute Code of Ethics and / or the CFAInstitute Standards of Professional Conduct. Given the informatio...
What is swap pricing? A.To find the fixed rate that makes the value of the swap zero at swap initiation. B.To compute the DCF value of an existing swap contract. C.To find the spread over a particular...
What is swap valuation? A.Find the fixed rate so that the value of the swap is zero at swap initiation. B.Find the current fixed rate of a swap that is similar to the existing swap. C.Find the DCF val...
You work at a mine site that has two gyratory crushers to process run-of-mine ore from the open pit. They are on a staggered schedule for planned major maintenance, and replacement as necessary. One o...
Can someone please check my work and let me know if the mathematical part is correct? We are Bechtel, a private US construction firm. We bid to develop the airport and the surrounding area for Thailan...
Please write in essay format and elaborate. The evidence is that practitioners do not hedge 100% of the time. They hedge about 70% and their great preference is the forward market . Elaborate on the i...
Use a financial calculator or computer software program to answer the following questions: a) Melanie is trying to save money for retirement and has a future goal of $750,000 at the end of 20 ...
2. Dan is considering borrowing $375,000 to purchase a new condo. Based on that information, answer the following questions. Show all work. a) Calculate the monthly payment needed to amortize ...
Please use the Forward contract or options approach when solving the problem for problem A. The problem has 2 parts, part A and B. Thank you so much A.) We have 100 million South African rand that is ...
We have 100 million South African rand that is payable in one year (we have to pay it to a South African company.) Assume the spot exchange rate is 10.05 rand equal one US dollar. Also, assume that th...
Would anyone be able to help explain this? There is a difference among a definite transaction and a contingent transaction exposure. Elucidate and include in your analysis whether the hedging tools ar...
Assumptions to consider: • $10 million cash purchase • Building generates additional net profits after tax of $1.25 million per year • 20 year expected useful life of building • Salvage value:...
A stock price is currently $80. Over each of the next two six-month periods, it is expected to go up by 6% or down by 6%. The risk-free interest rate is 5% per year with semi-annual compounding. Pa...
Question: A stock price is currently $80. Over each of the next two six-month periods, it is expected to go up by 6% or down by 6%. The risk-free interest rate is 5% per year with semi-annual compo...
Can you help explain how to answer this question step by step? We have 100 million South African rand that is payable in one year (we have to pay it to a South African company.) Assume the spot exchan...
A stock price is currently $80. Over each of the next two six-month periods, it is expected to go up by 6% or down by 6%. The risk-free interest rate is 5% per year with semi-annual compounding. Pa...
Part I. As a pension fund manager, you anticipate that you have to pay out 8 percent on $100 million for the next eight years. The payment is made semi-annually. You currently hold $100 million of flo...
Topic: Retirement Planning and Employees Provident Fund(EPF) QUESTION 4 (25 MARKS) (a) Read the following information and answer the question. -------------------------------------...
A stock price is currently $80. Over each of the next two six-month periods, it is expected to go up by 6% or down by 6%. The risk-free interest rate is 5% per year with semi-annual compounding. Pa...
A hedge fund is currently engaged in a plain vanilla interest rate swap with a company named NeverDown. Under the terms of the swap, the hedge fund receives six-month LIBOR and pay 8 percent per annum...
Question: A stock price is currently $80. Over each of the next two six-month periods, it is expected to go up by 6% or down by 6%. The risk-free interest rate is 5% per year with semi-annual compoun...
Q. Abbie purchased an apartment on 1 March 2005, for $300,000, and paid stamp duty of $15,000. She moved into it immediately. On 1 March 2015, Abbie bought herself a house. She immediately moved into ...
Question: A hedge fund is currently engaged in a plain vanilla interest rate swap with a company named NeverDown. Under the terms of the swap, the hedge fund receives six-month LIBOR and pay 8 percent...
1) Misty would like to invest $10,000 today. She is faced with the choice between 2 investments: Option 1: invest $10,000 today for 5 years; Option 2: invest $10,000 today for 1 year and reinvest pro...
Calculate the value of a bond that matures in 14 years and has a $1,000 par value. The annual coupon interest rate is 14 percent and the market's required yield to maturity on a comparable...
!Jason received a 15 year loan of $350,000 to purchase a house. The interest rate on the loan was 5.90% compounded semi-annually. a. What is the size of the monthly loan payment? Round to the nearest ...
"Four Cs of credit analysis" is used by analysts to evaluate creditworthiness. For each of the following scenarios, which of the "Four Cs" should be used for evaluation? Please also explain your answe...
A 20-year, $1,000 par value bond has a 9% semi-annual coupon. The bond currently sells for $925. If the yield to maturity remains at its current rate, what will the price be 6 years from now? a.$935...
[There are 8 things to answer below, but the question will be worth 5 marks in total] A trader establishes an option-trading strategy as follows: One long put option with a strike price of $70, which ...
You are a loan officer working at Syfield Mortgage Corp. A client, named Sara Wilson, has come to you to see if she how much she is qualified for a mortgage loan After sitting down with her, you came ...
A supplier of Unlimited Sunshine Limited is offering the opportunity to purchase key raw material on credit terms of net 30 days from the invoice date with a 2.5% cash discount if paid within 4 days. ...
1. Your objective is an annuity due paying $5,000 semi-annually for 5½ years at 4% compounded quarterly. How far in advance of this would you need to invest $20,000 at 6.82% compounded month...
On April 7th, 2020, Fitch Ratings Inc. downgrades Australia's four biggest banks credit ratings. How does this affect borrowers, lenders, and financial institutions ? What are the implications of this...
Helania is a small country in Eastern Europe with a hard peg currency system that uses the euro. The country is undergoing a string of financial deregulations and is considering adopting a new FX syst...
Expected return and standard deviation of a risky portfolio are 11% and 21% respectively. Risk-free rate is 5%. Mr. Yen constructed a complete portfolio with these two assets that maximises his utilit...
Owen's parents, who are retired, have gifted Owen $2,500 every December since Ellie's birth in 2015, which Owen then immediately contributed to an RESP for Ellie before year-end. i. For tax purposes, ...
You work for firm ABC situated in Australia, and your boss has become concerned about the current economic environment, especially as it is related to the different types of exposures that your firm m...
Please help !. o The couple has a line of credit to cover unexpected expenses. The maximum possible withdrawal is $15,000. Terms include a monthly principal repayment of 2% of the balance outstanding,...
Please help Q2 and Q3. Question 2 Sylvia is planning an investment. Her annual combined Federal and provincial marginal tax rate is 32%. If she invests $1,000 every year for 3 years starting today, ho...
The couple's mortgage is coming up for renewal. They borrowed $289,750 five years ago at a rate of 2.59%, compounded semi-annually. Their financial institution has offered them a renewal rate of 1.6...
The couple has a line of credit to cover unexpected expenses. The maximum possible withdrawal is $15,000. Terms include a monthly principal repayment of 2% of the balance outstanding, and an interes...
Aisha's gross income is $80,000 a year. She just purchased her first home with a 25-year amortization period and a 2.9%, compounded semi-annually, mortgage rate locked in for a 5-year term. Her paym...
Sylvia is planning an investment. Her annual combined Federal and provincial marginal tax rate is 32%. If she invests $1,000 every year for 3 years starting today, how much after-tax income will sh...
,A fund manager has been monitoring the performance of Virgin Galactic Corporation shares (NYSE: SPCE). The shares are currently trading at $34.8 on the New York stock exchange. The fund manager predi...
Can someone help explain this & illustrate it step by step? (English is my preferred language for the explanation) One US $ buys 50 West African francs, now. In one year, it buys 80 W. African fra...
Attached is 3 MCQ questions - the answer to each is appreciated. Not concerned about working out just trying to compare my answer. Q1) A project has an initial cost of $1,000,000 and is expected to la...
You work for firm ABC situated in Australia, and your boss has become concerned about the current economic environment, especially as it is related to the different types of exposures that your firm m...
In the Black-Scholes option pricing formula, an increase in a stock's volatility Decreases the associated put option value Does not change either the put or call option value because put-call parity h...
Consider a European call option and a European put option, written on the same underlying asset. Both options have the same strike price and the same maturity date. What does the put-call parity imply...
Which of the following are NOT true? Dividend changes follow shifts in long-term, sustainable earnings. Repurchases are generally tax advantaged relative to dividends. Firms seem to have long-run targ...
Consider a European call option for 100 shares of IBM Corporation, whose strike price is $170 per share and which matures 18 months from now. What does this option entitle you to do? Between now and 1...
Dr. Fauci is worried about his job. Once the pandemic is over, he won't get the same media exposure and starts thinking about how he can make more money. Thus, he thinks of starting a new set of bars...
Q3( C) Suppose that the forward ask price for March 20 on euros is $0.9127 and at the same time the price of IMM euro futures for delivery on March 20 is $0.9145. How could an arbitrageur pr...
You can't decide if you want to become an actual influencer or if you want to do it Denzel "Training Day" style train other people how to be influencers. Unfortunately, you only have time to do one. (...
You figure since there are 8,800 cryptocurrencies now - more than actual fiat currencies (180) or more than the number of companies listed on the US stock market (3,900) - why not start your own and t...
You see the price of TSLA stock is $687 a share. You aren't sure if you should give your money to the "Technoking of Tesla" and the "Master of Coin" so you try to figure out Tesla stock price. You see...
What is the lower bound of an American call option with 8 months to expiry and a strike price of 8. The underlying stock is currently trading at 14.8, and the risk-free rate is 10%. Do not enter th...
LOL Ltd has a current share price of $52. A put option written on LOL, which has a strike price has $55 and 8 months to expiry, is trading at $5.34. If the riskfree rate of interest is 7% pa (conti...
Which of the following is not a test of the semi-strong market efficiency? Tests of the performance of active mutual funds Tests of the performance of money managers Stock reaction to merger announcem...
If money earns 4.02% compounded quarterly, what single payment in two years would be equivalent to a payment of $3,070 due three years ago, but not paid, and $750 today? How much did Speedy Movers bor...
Kindly help. One. Part III: Case Application and Written Answers (9 marks) (ILO's: A1, B1, C1, C2, D4) The following is an extract from a Home Insurance Policy. We "the insurer" will provide cover for...
Questions 2 RSS Recruitment Ltd places highly qualified personnel in employment in the marketing and advertising industry. The company was two years ago and the initial capital of Ghc 150,000.00 for t...
Which is/are true about bonds that stipulate a call feature callable bonds? a. Have higher required returns than non-callable bonds b. Will normally be called after interest rates drop c. Can be calle...
When credit rating agencies issue ________ credit rating to a company, you can expect to see __________ yields on securities issued by that company. a. Higher; lower b. Lower; lower c. Higher; higher ...
Which of the following would be considered a characteristic of money markets and money market securities. I Relatively small trading costs II Minimal price risk III Relatively high yield IV Maturity g...
Which of the following securities are sold at an auction for a price that is discounted from the face value of the security? a. Commercial Paper b. Repurchase agreements c. Banker's acceptances d. Tre...
Compute the first six-month coupon payment on an inflation-indexed Treasury bond that has 10 years to maturity and a 5% coupon rate if the inflation during the period was 2% and the bond has a face va...
The type of bidders in a Treasury auction who specify both the quantity of bonds they are looking to buy as well as the price they are willing to pay are called _______ . A. Negotiable B. Noncompetiti...
1- Kiara sells clay pots at her pottery studio for $27 each. The overhead expenses are $11 per pot and operating profit is 28% on selling price. a. What is her amount of markup per pot? Round to t...
On 15 October 2020, CSL Limited (CSL) share price is $300. You have a friend who works at CSL and she told you - in the strictest of confidence - that they have just made a major breakthrough in their...
The price of a stock on July 1 is $75.7. A trader enters a long European put option on this stock with a strike price of $84.5. The quoted option price is $9.8. One option contract covers 100 shares. ...
What is the chronology of a dividend payment?26 declaration date, holder-of-record date, payment date, ex-dividend date declaration date, ex-dividend date, holder-of-record date, payment date holder-o...
Assuming that project has normal cash flow (ie only one change in sign of cash flow during project life). Which statement is mostly accurate?6 a The NPV will decrease if we lower the WACC for calcul...
A firm is considering two equally risky, mutually exclusive projects, both of which have normal cash flows, and no conflict between IRR and NPV. Project A has an IRR of 14%, while Project B's IRR is ...
Issuing new financial instruments is not a cheap undertaking, and a firm will incur both direct and indirect costs when using an investment bank and the underwriters. Which of the following should be ...
ABC Co. is running a project that has normal cash flows (one negative cash flow at time 0 followed by series of positive cash flows.) In that case which choice is most accurate?3 a MIRR of project ...
No Excel! Please show all workings. Question 1: If the number of C$ per ¥1.00 decreases by 0.00054 from the value C$0.01205 = ¥1.00, which currency has appreciated and by what percentage? (Round to ...
No Excel! Please show all workings. Question 1: Kevin lives in Calgary and wants to buy a 2012 Corvette. The best price he can find for a low-mileage model in Alberta is $59,000. (No GST would be paya...
Pierre is 24 years old and has always lived in Quebec. Upon graduation from Concordia last year, he landed a fantastic full-time job and decided to spend his pay cheques on buying a BMW for his first ...
only offering answer is fine Identify which statement is not correct in relation to M&As. When evaluating mergers: Select one: a. It is advisable to use more than one val...
only answer is fine Rights (or entitlement) share issues are: Select one: a. Share offers used to distribute capital. Rights offers primarily target new investors and are offered at a discou...
Identify which statement is not correct. In a takeover bid to acquire a part or all shares in another company: Select one: a. Target company management would not accept an offer where the consider...
Identify a statement which is not correct. IPO underpricing can be explained as: Select one: a. The result of information asymmetry between investors and the issuing firm. b. IPO firm's attempt ...
Lowell Corporation recently issued 10-year bonds at a price of $1,000 with a 8 percent semi-annual coupon at par. Now it wishes to issue new 10 year bonds with 4 percent semi-annual coupon with a fac...
No Excel! Please show all workings. Question 1: A five-year loan of $25,000 at 7.2% compounded quarterly requires quarterly payments. a) Calculate the interest component of Payment 10. b) Calculate th...
No Excel! Show all workings. Question 1: The Archibalds are eligible for Canada Mortgage and Housing Corporation's Mortgage Loan Insurance. Consequently, their limits are 95% for the loan-to-value rat...
Janet Lee and Ross both have employer-sponsored group health and dental plans that offer both a small amount of life insurance ($25,000 each), long-term disability (two-year any/own definition of disa...
/ "Blue Cheese Company purchases 16,763 boxes of cheese each year. It costs $14 to place and ship each order and $9.17 per year for each box held as inventory. The company is using Economic Order Quan...
Bridget is a participant in the Life-Long Learning Plan (LLLP) and has her first scheduled repayment due in 2021. Her annual repayment amount is $1,000, based on a 10-year schedule. Regarding Bridget'...
Brad tells you about his plans to upgrade his auto insurance. Specifically, he would like to add several types of coverage to his policy, such as family protection coverage and rental car coverage. Re...
Chris and Karen are married and own a three-bedroom home in a large Midwestern city. Their son, Christian attends college away from home and lives in a fraternity house. Their daughter, Kelly, is a se...
A two-step binomial tree is used to value an American put option on one share of ABC stock. The strike price is $150 and the expiration date is in 6 months. Each step is 3 months. Today's spot price o...
The current price of a non-dividend-paying stock is $175. Over the next year it is expected to rise to $215 or fall to $130. Assume the risk free rate is 3%. An investor buys a call option with a stri...
A trader creates a short straddle using put and call options with a strike price of $200 per share by trading a total of 20 option contracts (short 10 put contracts and short 10 call contracts). Each ...
A trader creates a bull spread using put options with strike prices of $160, and $180 per share by trading a total of 40 option contracts (20 short 180-strike put contracts and 20 long 160-strike put ...
The price of a European put that expires in one year and has a strike price of $210 is $15. The underlying stock price is $203 and the stock does not pay any dividend. The risk free rate is 5%. a) Wha...
1. Assume that the stock price is $100 per share and that the stock does not pay any dividend. The options are one-year European options and the exercise price of these options is $100 per share. The ...
Treble Inc. planned and manufactured 251,000 units of its single product in 2019, its first year of operations. Variable manufacturing costs were $32 per unit of production. Planned and actual fixed m...
Shade Company adopted a standard cost system several years ago. The standard costs for direct labor and direct materials for its single product are as follows: Materials (5 kilograms × $12/kilogram) ...
How did the Thai central bank seek to defend their currency when it came under speculative attack in 1997? They bought US dollars for reserves. They sold US dollars. They printed more Thai Baht. They ...
A Big Mac is 3.50 dollars in the US and 3.25 pounds in the UK. The exchange rate is 1.12 $/pounds. The dollar is overvalued by 4% The dollar is undervalued by 4%. The pound is undervalued the 4%...
Before the Euro, the Bank of England was trying to maintain an exchange rate that was tied to the Deutsche mark. The principal reason this did not work is that the two countries had very different le...
29. If China were to move to a fully convertible currency, ending currency sterilization, and assuming no change in the Current Account or Capital/Financial Accounts of the Balance of Payments, which ...
What is the risk if a US corporation takes out a five year fixed rate loan in a low interest foreign currency and turns it into US$ without hedging If the foreign currency strengthens too much If the ...
21. Assume Broward General Hospital (BGH) issued bonds with a ten-year maturity, a 12% coupon rate with an annual payment, and a $1,000 par value. I apologize but the question was incomplete. I failed...
Garvin Enterprises is considering a project that has the following cash flow and WACC data. What is the project's discounted payback? CF Initial investment (960.00) Cash flow-yr-1 ...
you are the new CEO of Triangle Pediatrics, and two weeks after you started in your new position, the Chief Financial Officer and Associate PV of Finance left for greener pasture. The parent of one of...
Yasmine took a great course in Personal Finance at Concordia where she learned about the Pay Yourself First Method. She has decided to apply this as of her first pay where she landed a fantastic job a...
Which of the following is NOT correct about the description of growing perpetuity? The cash flow amount is constant every period. The present value is finite if the growth rate is less than the discou...
An annuity is defined as cash flows growing at a constant rate every period for a finite number of periods. cash flows growing at a constant rate forever. equal dollar amount of cash flows every perio...
Suppose you will receive annual payments of $700 forever. The first payment will be made 4 years from now. If the interest rate is 20% per year, what is the present value (@ t=0) of this stream of pay...
You just landed a job that will start next year (i.e. year 1). They are offering a starting salary of $60,000 (next year). You expect the salary to grow by 2% every year until you retire. You plan to...
The Lo Sun Corporation offers a 6% coupon rate bond with a current market price of $874.2. The yield to maturity is 7.35%. The par value is $1,000. Coupon is paid semiannually. How many years is it un...
Panther Corp. stock is trading at $18.53. The firm pays annual dividends which increase at a constant rate. The last dividend paid was $1.32 a share. If the required return on the stock is 14%, what i...
ABC Corp. has expected dividend of $5 per share for next year. The firm's ROE is 15% and its dividend payout ratio is 60%. Assume a discount rate of 10%. What is the present value of its growth opport...
What is the argument for using sector-specific multiples? Question 4 options: Sector-specific multiples allow use to tie value to something critical (and unique) to a sector. Sector-specific multiples...
How do stock buybacks affect the price to book ratios? Question 2 options: Stock buybacks reduce the book equity disproportionately Price to book ratios increase after stock buybacks Both A and B Neit...
Question Triangular Chemicals has total assets of $91 million, a return on equity of 39 percent, a net profit margin of 5.4 percent, and an equity multiplier of 2.84. How much are the fir...
(Liquidity Analysis) The King Carpet Company has $3,180,000 in cash and a total of $11,030,000 in current assets. The firm's current liabilities equal $5,510,000 such that the firm's ...
(Related to Checkpoint 4.3) (Profitability analysis) Last year the P. M. Postem Corporation had sales of $434,000, with a cost of goods sold of $114,000. The firm's operating ...
Jimmy has a bond with a $1,000 face value and a coupon rate of 9.5% paid semiannually. It has a five-year life. a) If investors are willing to accept a 14 percent rate of return on bonds of ...
Co. wants to issue new 19- year bonds for some necessary expansion projects. the company currently has 8.2% coupon on the market that sell at 1148.09, make semiannual payments, and mature in 19 years....
The CFO is proposing that her company issues debt to repurchase shares, because the company's current leverage ratio is only 10% and the CFO believes that increasing leverage will increase company val...
Angola Superheros, Inc. is considering launching a production of a new superhero toy. The production and sales are expected to last 4 years. The project would require a new machine, with a cost of $1,...
Angola Superheros, Inc. is considering launching a production of a new superhero toy. The production and sales are expected to last 4 years. The project would require a new machine, with a cost of $1,...
Please help me to answer this with Excel XIRR: Discount rate: 12% Assume the following cash flows on the specified date: 1/2/2013 $ (1,000.00) 9/19/2013 $ 250.00 1/2/2014 $ 250.00 1/2/...
Please help to fill the blank with your answer, thank you so much: ------------------- measures the movement of one stock against the movement of another stock over time and takes into account...
Please help to fill the yellow highlighted cell with your answer, thank you so much: The ratio is another measure of the risk adjusted returns of a security. Ely dividing the excess security.r return ...
The CFO is proposing that her company issues debt to repurchase shares, because the company's current leverage ratio is only 10% and the CFO believes that increasing leverage will increase company val...
Andrew Industries is contemplating issuing a 30-year bond with a coupon rate of 7% (annual coupon payments) and a face value of $1000. Andrew believes it can get a rating of A from Standard and Poor's...
Are the following statements true or false. Briefly explain why? 1. Company X is a profitable company that has been downsizing in the most recent year 2. As is typical of public firms in the US, Compa...
A machine costs $300 today (year 0). Assume this investment is fully tax-deductible, as stipulated by the new US corporate tax code of 2018. ?...
The balance sheet and income statement for the J. P. Robard Mfg. Company are as follows: . Calculate the following ratios: Current ratio Times interest earned Inventory turnover Total asset...
1. Ms. Miller is 25 years of age as of today. She wants to retire at age 65 and wants to save equal amounts annually over next forty years so that she can have annual income of $80,000 from t...
Financial Statement Analysis Required : Refer to Tesla, Inc.'s 2019 Form 10K and specifically item 8, Financial Statements and Supplementary Data, which is included in the fina...
You are the CFO of a drug company, and you must decide whether to invest 25M dollars in R&D for a new drug. If you conduct the R&D, you believe that there is a 5% chance that the research will...
1) Which is false under the Home Buyer's Plan (HBP)? I. If you withdraw $20,000 for a down payment on your first home, your minimum repayment would be $1,333.33 into yo...
1. First Safe Interstate Bank is a small, regional bank that is trading at a price to book (equity) ratio of 1.50. The bank is in stable growth, with earnings and dividends expected to grow 3% a year ...
(based on Chapter 9) A new machine will cost $250,000. The expected market value of the machine at the end of each year, and the annual maintenance costs are given in the table below. Assuming 11% cos...
Angola United Theaters, Inc. is considering opening a new movie theater in Angola, Indiana. The relevant cost of capital is 8%. The purchase, renovation, and modification of a downtown building would ...
The city of Angola, Indiana is considering building a snowmobile trail on the land owned by the city. The life of the project is assumed to be 20 years. Building the trail would require an investment ...
Sandra stopped working, and stopped contributing to the Canada Pension Plan, on her 65th birthday. At age 65, she applied for and began to receive her CPP retirement income. Her birthday falls on July...
Please help me to choose one of these answers: Which is false under the Home Buyer's Plan (HBP)? I. If you withdraw $20,000 for a down payment on your first home, your min...
1. An $8000 demand loan at a fixed rate of 10.5% was advanced on May 10. A payment of $2000 was made on July 15 and a final payment was made on Sept. 5. What was the size of the final payment? 2. A ho...
Please solve in Excel using formula and formula text function Question 5 (based on Chapter 13) Estimate the weighted average cost of capital for Caterpillar, Inc. (ticker CAT), using the income statem...
1 ) A project has sales of $611,208, cash costs of $338,911, and depreciation expense of $74,209. The tax rate is 34 percent and the discount rate is 14 percent. What amount should be used as the depr...
1.Your investment has a 30% chance of earning a 1% rate of return, a 40% chance of earning a 11% rate of return and a 30% chance of earning -5%. What is the standard deviation on this investment? (P...
1.Which of the following are typical banker's acceptance maturity lengths? Check all that apply. -1 day -2 weeks -135 days -225 days 2.Which of the following are properties of banker's acceptances? ...
Everything else equal, which of the following conditions will result in the lowest present value of $100 to be received in three years? A. annual compounding B. quarterly compounding C. monthly co...
1. What steps should you take prior to making a purchase? 2. What steps should you take while making a purchase? 3. What steps should you make after you make a purchase? 4. ?...
Which of the following statements is correct? a. When calculating the cost of debt, a company needs to adjust for taxes, because interest payments are deductible by the paying corporation. b. If a com...
You are considering two different payment plans for the lottery you just won. Option 1 pays $10,000 today and Option B pays $20,000 at the end of ten years. Assume you can earn 6.5 percent on your sav...
Consider the same two firms U and L - that are identical except for capital structure. Each firm expects EBIT of $650,000 each year forever. Firm U has a cost of equity of 10% and Firm L has $2 millio...
A company just paid a dividend to its common shareholders of $7.50 per share, so DIV 0 = $7.50. A newly introduced product line is expected to increase dividends by 75% for the next (or upcoming...
Using the following initial cost and cash flow figures below for Projects 1 and 2, please answer the three questions (a, b, and c). ?...
Chittenden Enterprises has 634 million shares outstanding. It expects earnings at the end of the year to be $960 million. The firm's equity cost of capital is 9%. Chittenden pays out 30% of its earnin...
Two years ago, Jim bought 100 shares of IBM stock at $50 per share, and just sold them for $65 per share after receiving dividends worth $3 per share over the two year holding period. Mary, bought 5 o...
The covariance of the returns between Willow Stock and Sky Diamond Stock is 0.0820. The variance of Willow is 0.1130, and the variance of Sky Diamond is 0.1470. What is the correlation coefficient bet...
If TFSA contributions of $10,000 at the end of every year are projected to generate a plan worth $1,000,000 in 25 years, what effective rate of return was assumed in the forecast? -the book says 10.11...
1. Duke was approved for a 30 year conventional loan for $250,000 at 3.65% fixed rate. He was also approved for a 15 year conventional loan for $250,000 at 3.45% fixed rate. He has $20,000 to p...
1. True or False? Explain. According to the CAPM, investors require a higher return to hold securities that are highly volatile. According to the CAPM, all risky assets must have positive risk premium...
1. Agree or disagree with the following statements then discuss: a. " Liquidity services are services that make it easier for customers to conduct financial transactions" b. ?...
Question 1 OldBooks, a book selling company with market assets of $100M, equity beta of 1.2 and D/E=1, is considering expanding into the internet business. They have the following estimations regardin...
Under a Normal Distribution of stock returns, the following measurement of risk will identify approximately 2/3 of all observations within one of these under the normal distribution curve a. var...
15. Normal retirement age means: a. An employee cannot retire with a full pension before age 60. b. The age at which an employee can received the full amount for each year of service. c. Age 65. d. Th...
14. For a defined benefit pension plan, all of the following are true except: a. Benefits might increase each year to reflect inflation. b. Benefits might be integrated with CPP retirement income. c. ...
13. Which of the following is not true? a. Before age 65, an employee must have actually retired to receive a pension. b. After age 65, an employee can receive both a pension and earned income from th...
10. Which of the following statement(s) are correct? a. Defined benefit plans can generate surpluses. b. Defined contribution plans cannot generate surpluses. c. Deferred profit sharing plans are a ty...
The spot price of the market index is $900. After 3 months the market index is priced at $920. The annual rate of interest on treasuries is 4.8% (0.4% per month). The premium on the long put, with an ...
Which of the following is true for market value accounting method? a. FIs generally report their balance sheets using this method. b. None of the options. c. Reports assets and liabilities at the orig...
Can you please explain the Economic Value Added (EVA) Interpretation of the below information. CALCULATION OF EVA - ECONOMIC VALUE ADDED EBIT:$1,601,400.00 Less: Taxes$239,700.00 Equals: N...
ou are hoping to buy a new boat 3 years from now and you plan to save $4,200 (forty two hundred) per year, beginning one year from today. You will deposit your savings in an account that pays 5.2% (fi...
Spielberg builds a portfolio by investing in two stocks only: Google (GOOG) and Huawei (SHE). According to the CAPM, the expected risk premium (i.e., the expected return minus the risk-free rate) of ...
You open a checking account. You are paid 3% interest on the average daily balance, but are charged a $4 monthly charge. Assuming that interest is paid monthly (regardless of the number of days in t...
John Doe Enterprises borrowed $149,500 for three years from the bank. At the end of the three years, they repaid the loan with one payment of $176,590. What was the quoted interest rate on the loan? A...
On January 1975, the Mexican peso/ US$ exchange rate was Ps12.5=$1. By January 1985, the exchange rate stood at Ps208.9=$1. By how much has the Mexican peso appreciated or depreciated against the doll...
Calls for gold standard reflect: Group of answer choices desirability of gold distrust of government to maintain the integrity of fiat money that the gold standard can be adopted by the US if there is...
Which of the following statement concerning the exchange rate regime is NOT true? Group of answer choices a. The gold standard is favored by some in conservative quarters because of its implication fo...
Which of the following is NOT a criterion to use in determining whether an industrial firm is a multinational corporation? Group of answer choices by the extent of international portfolio investments ...
A CFO of a company with a market capitalization of $1B. The firm has 132 million shares outstanding, so the shares are trading at $10.68 per share. Each existing shareholder is sent one right for ever...
Gustav Co. reported $204400 of sales, $134550 of operating costs other than depreciation, and $8040 of depreciation. The company had $33150 of outstanding bonds that carry a 6.75% interest rate, and i...
Company Detox, is a private company that designs, manufactures and distributes certain consumer products. In this fiscal year, Detox had revenues of $401M and earnings of $21M. Detox company has filed...
JJ firm issues preferred dividends at an annual rate of $3.06. Its current preferred stock price is $22.65. Assume that the equity beta for JJ is 0.93. The Yield on 10-year treasuries is 2.74%, and th...
Suppose Corporation A has a book (face) debt value of $9M, trading at 89% of face value. It also has book equity of $21 million, and 2.91 million shares of common stock trading at $20 per share. What...
Suppose Corporation A has a book (face) debt value of $9M, trading at 84% of face value. It also has book equity of $21 million, and 2.21 million shares of common stock trading at $21 per share. What...
Using the mortgage calculator Determine the following: Jane is going to purchase a home that is $180,000, she makes the standard down payment (20%), then she is going to obtain a mortgage for the...
Gustav's best friend, Garfield, owns a lasagna factory. Garfield's financial skills are not very strong, so he asked Gustav to take a look at his financials. Here is the information Garfield provided ...
You want to purchase a house, and you have agreed on a selling price of $230,000. The bank will give you a loan for 30 years, and the interest rate will be 3.5%. Assume that you will finance the enti...
Assume an equity market neutral portfolio (i.e., beta = 0) is constructed from a combination of one part investors' "equity" contributions and five parts leverage. This levered strategy produced a gro...
New equipment costs $675,000 and is expected to last for five years with no salvage value. During this time the company will use a 30% CCA rate. The new equipment will save $120,000 annually before ta...
6.There are both costs and benefits of using debt as part of a company's capital structure. Explain what the optimal capital structure of a company is, and give one cost and one benefit of including d...
4.Consider a 10-year $1000 bond that was issued 4-years ago. If the bond has an annual coupon rate of 6%, pays coupon semi-annually, and is currently selling for $1,027. Estimate if the yield to matur...
3.Assume that NVX Ltd. would like to raise $3,500,000 with a new issuing of bonds. Assume that the issue will have a coupon rate of 3% with a 6 years maturity. Assume this are semi-annual coupon bonds...
A supplier charges 15% interest on past-due accounts. Interest on a $700 account is $15.99. For how many days must the account have been overdue, assuming the supplier uses a 365-day year? please show...
Assume an individual makes a lump sum investment at the beginning of year one of $35,763, the present value of which is $35,763. The investor's discount rate, for an alternative safe investment, is 12...
Assume an individual makes a lump sum investment at the beginning of year one of $19,760, the present value of which is $19,760. The investor's discount rate, for an alternative safe investment, is 5....
Jack asked Jill to marry him, and she has accepted under onecondition: Jack must buy her a new $330,000 Rolls-Royce Phantom. Jack currently has $15,490 that he may invest. He has fo...
Triangular Chemicals has total assets of $106 million, a return on equity of 40 percent, a net profit margin of 5.2 percent, and an equity multiplier of 2.51. How much are the firm's ...
Robert has twins and anticipates a minimum need of $104,000 for college education funds in 13 years when his kids start college. How much money should Robert put in an account today? Assume that the a...
Assume that the current annual costs for your client's choice of college for this son are $29,000. Your client's son is now 4 years old and assuming he will be age 18 when beginning college. The colle...
MLC Fund Management is considering the following three (3) options for their new investment portfolio: Option 1 - A non-callable corporate bond that pays a coupon rate of 8% annually. The bond will ma...
Alice has $5 000 now. She wants to save $25 000 to buy her first car. She decides to put that $5 000 in an investment fund that pays an interest rate of 10% per annum (per year), compounding annually....
You are the CFO of Midas Mining Ltd and the company is looking to expand its mining operations. Your staff have narrowed it down to two (2) projects, with the cash flows presented in the table below. ...
A $150,000, 30-year interest-only mortgage, with a 5-year interest-only period, has an 8% interest rate, compounded monthly. During the 2nd year of the mortgage, assuming no prepayments, the required ...
The initial rate on a 30-year, 3/1 ARM is 4%. The loan has a margin of 2.5%, a 2% per year cap, and a 6% lifetime cap. At origination, the index (1-year T-Bill) is 1%. The maximum rate that can ever b...
Comparing a 4% 30 year mortgage with no points and a 3.75% 30-year mortgage with one point, if the buyer expects to remain in the house for about 4 years, then the no points mortgage is the better cho...
The down payment is $200,000 on a house with an agreed- upon price (and appraisal) of $1,200,000. Jumbo mortgage rates are 4.3% and conforming rates are 4%. If the conforming loan limit is $700,000 in...
if there is a $100,000 1st mortgage on a residential property that is current (not delinquent), and a $50,000 2nd mortgage that is seriously delinquent, should the 2nd mortgage lender foreclose if the...
Tony's son, Mark will start college in 8 years. Tuition costs $26,000 today, increasing at an annual rate of 6.1%. Tony wants to earn 8.5% annually on his investments. If he makes an initial investmen...
Charles estimated a minimum need of $229,000 for college education fund for his son in 13 years when his son will start college. Assume that after-tax rate of return that Charles is able to earn from...
A credit analyst has received a $500,000 order from a new customer. The cost of filling the order (i.e., COGS) is $20,000 and collection costs are 1% of sales. The credit analyst notes that the COGS...
Complete: Consider the following transactions: (1) CBA makes a $50m interbank loan to ANZ. (2) ANZ repays $30m to the RBA as part of the completion of a repurchase agreement of government securities m...
Now William knows that he will have 577,000 in his inheritance fund, when he will reach age sixty. He would like to know how much he could withdraw from the fund in equal installments at the end of ea...
1) Neil and Sandra each borrowed from their Registered Retirement Savings Plan (RRSP) under the Home Buyer's Plan (HBP) for the down payment on the purchase of their first home. If Neil and S...
