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Explain how the following scenarios should be resolved: Murrays can borrow money at a fixed rate of 10.5 percent or a variable rate set at prime plus 2.25 percent. Fred’s can borrow money at a variable rate of prime plus 1.5 percent or a fixed rate of 12 percent. Murrays prefers a variable rate and Fred’s prefers a fixed rate. The swap dealer will take a 1.5 percent profit. Specify what the rate each party will pay and receive from the dealer and how each dealer will lock in their profit. please show work
Murray:
Pay
Receive
Savings
Fred:
Dealer:
Pay to Murray
Receive from Murray
Profit
Pay to Fred
Receive from Fred
Stock X has a 10% expected return, a beta coefficient of 0.9 and a 35% standard deviation of expected returns. Stock Y has a 12.5% expected return, a beta coefficient of 1.2, and a 25% standard deviation. The risk-free rate is 6%, and the market risk..
Bank liquidity management on the liability side of the balance sheet is normally carried out in the ________ market. (Remember that markets for fixed income instruments differ depending on the maturity of the instrument being traded.)
Suppose that the market price of a stock is up to $37.00 and an investor has $550 worth of 100 shares with the strike price of a call at $33.00. Calculate the time value for a buyer's call.
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On March 20, 2012 you bought 1,000 shares of Starwood Hotels & Resorts Worldwide Inc. (HOT) at $14.00 on 50% margin. The margin loan carries a 8% annual interest rate, paid every 3 months from the day of the purchase. Calculate the HPR (%) and profit..
ABC Company's stock has a beta of 1.32, the risk-free rate is 5.25%, and the market risk premium is 5.50%. What is the firm's required rate of return?
You manage an equity fund with an expected risk premium of 12.8% and a standard deviation of 42% The rate on Treasury bills is 3.4% Your client chooses to invest $75,000 of her portfolio in your equity fund and $75,000 in a T-bill money maiket fund W..
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Engineers at a national research laboratory built a prototype automobile that could be driven 180 miles on a single gallon of gasoline. They estimated that in mass production the car would cost $40,000 per unit to build. In your opinion, is energy ef..
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