Smith earned during the time he held the t-bill

Assignment Help Financial Management
Reference no: EM13338019

1: Smith buys a 182-day US T-Bill at a price which corresponds to a quoted annual rate of 182-day T-Bills of 10%. 91 days later smith sells the T-Bill at which time the prevailing quoted annual discount rate of 91-day T-Bills is also 10%. Find the actual rate of return (91-day interest rate) that Smith earned during the time he held the T-Bill.

2: Bob Borrow 1000 from Ed at effective annual interest rate i, agreeing to repay in full at the end of one year. When the year is up Bob has no money but they agree that he can repay one year later in such a way that the effective annual discount rate d in the second year is numerically equal to the interest rate i in the first year. At the end of the second year Bob pays 1200. What is i in the first year?

Reference no: EM13338019

Questions Cloud

Return characterized by probability distribution given file : Suppose that one of your colleagues has $2000 available to invest.Assume that all of this money must be placed in one of threeinvestments: a particular money market fund, a stock, or gold. Eachdollar your colleague invests in the money market fund ea..
Strategy that maximizestechwares expected net revenue : Techware Incorporated is considering the introduction of two newsoftware products to the market. In particular, the company hasfour options regarding these two proposed products: Techware Incorporated is considering the introduction of two newsoftwar..
What is the weighted average cost of capital wacc : What is the weighted average cost of capital WACC
Maximizes landowners expected net earnings from opportunity : A local energy provider offers a landowner $180,000 for theexploration rights to natural gas on a certain site and the optionfor future development. This option, if exercised, is worth anadditional $1,800,000 to the landowner, but this will occur onl..
Smith earned during the time he held the t-bill : Smith buys a 182-day US T-Bill at a price which corresponds to a quoted annual rate of 182-day T-Bills of 10%. 91 days later smith sells the T-Bill at which time the prevailing quoted annual discount rate of 91-day T-Bills is also 10%. Find th..
What terminal-instrumental values are likely to be important : How would you characterize Jeffery Immelt’spersonality & What terminal and instrumental values are likely to be important to him.
Differentiate between short range planing-long rangeplaning : Differentiate between short range planing and long rangeplaning and also explain the different role of managers.
Expalin the needs of short range-intermediate range : Expalin the needs of short range, intermediate range and longrange objectives of an organization? also please mention the time frame used to differentiate these objectives?
Portfolio weightings : what rate of return would you expect to earn from each of the portfolios?

Reviews

Write a Review

Financial Management Questions & Answers

  Explain a trend assesment of the company financial statement

Want to compare my stats with a financial professional. Draft a trend assesment of the company financial statements. (My company is Amgen, the biopharmaceutical company).

  What is sensitivity analysis and what is its purpose

Explain how simulation works. What is the value in using a simulation approach and what is sensitivity analysis and what is its purpose?

  How many shares will green repurchase

What will be the market value of Green's equity after the bond issue and share repurchase are completed - what was Green's weighted average cost of capital before the change in capital structure?

  Explain what is ssp''s net investment required in the fmc

What is SSP's net investment required in the FMC? Assume that both pieces of equipment are being depreciated to a zero salvage value?

  Understand the sources of finance available to a business

Explain the type of business organisation and it's ownership This should include : The business's name, the form of business organisation, (Partnership, Sole trader or limited company)

  What is a business plan

Explain how the idea of a brewing device for a small apartment became a startup enterprise. What did you learn from that bit of entrepreneurial history

  What is the present value of the bond show your work

After six months go by, you receive the first interest payment of $300. The annual market interset rate has declined to 5 percent and you decide to sell the bond. What is the bond's present value when you sell it? show your work.

  Impact on eps if new shares are issued to fund the centre

Brown needs to raise $500,000 to construct the new amusement centre. Assuming the company can issue new shares at the current market price, what is the impact on EPS if new shares are issued to fund the centre?

  Complete the financial reporting for each period

Complete the financial reporting for each period

  Determine v-s-rs and wacc for firms u and l

Assume that Firms U and L are in the same risk class and that both have EBIT = $500,000. Firm U uses no debt financing, and its cost of equity is rsu = 14%. Firm L has $1 million of debt outstanding at a cost rd =8%.

  What some of the factors that a finance manager considers

What some of the factors that a finance manager considers in choosing an appropriate discount rate for a capital investment project

  Compare the hedging alternatives for the eur receivables

Compare the hedging alternatives for the EUR receivables with a scenario under which Yankee remains unhedged and Compare the hedging alternatives for the MYR with a scenario under which Yankee remains unhedged -Do you think Yankee should hedge or r..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd