### What are two components of a total holding period return

Assignment Help Finance Basics
##### Reference no: EM13870106

Q-1. Explain the followings
a. Time Value of money and its importance in the field of Finance
b. The rule of 72 with an example
c. Annuity and perpetuity

Q-2. Solve the followings.

a. Mohammad Khalid is planning to invest \$10,000 in a bank fixed deposit for 5 years. The bank promises to pay 9 percent interest rate on the deposit. What is the
future value of Mr. Khalid investment?

b. You are planning to buy a BMW sports car next year. You predict the car will cost \$ 50,000. If your bank pays 5 percent interest on your savings, compounded annually, how much will you need to deposit today to have \$50,000 after one year?

c. Suppose that a firm deposits \$ 5,000 at the end of each year for four years at 6 percent rate of interest. How much will be the value of this annuity at the end of fourth year?

Q3. What are two components of a total holding period return? Mr. Jamil buys a stock for \$30.00. After one year, the stock price becomes \$ 35.00 and he receives a dividend of \$0.80. Calculate his total return for the period.

Q4. Define expected return. From the following information calculate expected rate of return for the stock ‘X'.

 Probability ( chances) of return Return in % for X .1 -8 .2 10 .4 8 .2 5 .1 -4

Q5. Discuss Capital Asset Pricing model (CAPM). Calculate the expected rate of return for a stock from the following information.

Risk free rate= 10%
Expected return on market=18%
Beta of the stock=1.35

4. Discuss diversifiable(unsystematic risk) and non-diversifiable risk( Systematic risk)

5. Discuss features of corporate bonds and also discuss types of bonds.

Verified Expert

#### What is the payback period

Primus Corp. is planning to convert an existing warehouse into a new plant that will increase its production capacity by 45 percent. The cost of this project will be \$7,125,

#### What is the expected level of sales for the next year

Gary's Pipe and Steel compnay expects sales next year to be \$800,000 if the economy is strong, \$500,000 if the economy is steady, and \$350,00 if the economy is weak. Gary

#### What is the rotor frequency for a 60 hz induction generator

Explain the difference between rotor speed and rotor frequency. For s = -0.01 and a rotor speed of 1740 rpm, what is the rotor frequency for a 60 Hz induction generator?

#### Name three specific options that are available to genesis

Name three specific options that are available to Genesis Energy for obtaining needed capital. Identify and explain two ways Genesis Energy can improve its strategy.

#### Determine purchased during the third quarter

A manufacturing corporation manufactures a product called Formido. Each unit of Formido requires two pounds of Lima. The budget calls for production of 8,000 units of Formido

#### Assessing the validity of the two mutually exclusive project

You have been asked to develop a financial analysis of two projects and based on Net Present Value (NPV), Return on Investment (ROI), and Profitability Index (PI),  Briefly

#### Explain in what sense insurance policy on its receivable

Suppose your company has purchased a put option on the euro to manage exchange exposure associated with an account receivable denominated in that currency. In this case, your

#### Health care financial reform proposal

Write a paper (1,500-2,000 words) on what you think should be included in a future reform of the health care system, focusing on financial operating changes that would impro

### Write a Review

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!