Example of market value-weighted index

Assignment Help Financial Management
Reference no: EM13868390

True and False

1) Dow Jones 30 Industrial Average is an example of Market value-weighted index.

2) Financial statements of a large corporation prepared using US GAAP and IFRS may have some difference but the P/E ratio will be same under GAAP and IFRS.

Reference no: EM13868390

Questions Cloud

Calculate your return on investment one year later : Suppose you purchase 1,100 shares of stock at $49 per share with an initial cash investment of $18,000. The call money rate is 5 percent and you are charged a 1.5 percent premium over this rate. Calculate your return on investment one year later if t..
Anagerial accounting-finance is use of cost benefit analysis : A key technique in managerial accounting/finance is the use of “Cost Benefit Analysis” to help management make better business decisions. Define this approach in your own words and discuss 1-2 applications of this concept in the Acquisition/Contracti..
Hedging with options removes performance potentials : Hedging with options removes both upside and downside performance potentials. Options are used to insure an existing portfolio. For example, buying a put on an asset (or portfolio) reduces the risk of loss in case of a drop in value of the asset.
The return on foreign bond is the sum of the yield : The return on a foreign bond is the sum of the yield over the holding period plus any capital gain/loss, plus currency gain/loss. A short hedge involves selling futures contracts to cover the risk on a position in the spot market.
Example of market value-weighted index : Dow Jones 30 Industrial Average is an example of Market value-weighted index. Financial statements of a large corporation prepared using US GAAP and IFRS may have some difference but the P/E ratio will be same under GAAP and IFRS.
Downward movement of the british stock market : You would like to protect your portfolio of British equity against a downward movement of the British stock market. Which derivative can be used to achieve this?
Investing in an emerging market bond is risky : From an US investor's perspective, investing in an emerging market bond is risky because of:
What is the total cash paid for this bond purchase : You purchase a Eurobond, at a quoted price of 102%. The annual coupon is 6%, and we are exactly one month after the past coupon date. You buy 100,000 EUR nominal value of the bond. What is the total cash paid for this bond purchase?
Investment project has an annual operating cash flow : A investment project has an annual operating cash flow of $34,827. Initially, this 4-year project required $5588 in net working capital, which is recoverable when the project ends. The firm also spent $100,000 on equipment to start the project. This ..

Reviews

Write a Review

Financial Management Questions & Answers

  Accusoft systems offers business owners software package

The company "Accusoft Systems" offers business owners a software package that maintains the records of many accounting functions from sales bills through bank transactions. The site license costs $ 22,000 per installation concept and involves a fee o..

  Financing activity on the cash flows

Which of the following would be classified as a financing activity on the statement of cash flows?

  Wide cost of capital for analyzing capital expenditures

ExxonMobil ( XOM) is one of the half- dozen major oil companies in the world. The firm has four primary operating divisions ( upstream, downstream, chemical, and global services) as well as a number of operating companies that it has acquired over th..

  Prepare a balanced scorecard

Explore the need for organisations to calculate and manage performance against objectives, as well as the potential effectiveness of tools such as Balanced Scorecards and Strategy Maps as aids in this cause.

  Hedging using foreign currency derivatives scout finch is

hedging using foreign currency derivatives scout finch is the chief financial officer cfo of salem manufacturing a u.s.

  Utilized special purpose entities

Enron utilized Special Purpose Entities (SPE) in the Cayman Islands to significantly improve its sales and income. AIG and others have used offshore insurance contracts to “smooth out” their earnings. Is it unethical if these corporations enter into ..

  What is the expected bond value

Consider a $1,000 par value bond with a 7% annual coupon. The bond pays interest annually. There are 20 years remaining until maturity. You have expectations that in 5 years the YTM on a 15-year bond with similar risk will be 7.5%. What is the expect..

  About the rate of interest

Bank of America has granted you a ten year loan for $65,000. If your ten annual end of the year payments are $13,380.50, what is the rate of interest Bank of America is charging?

  Consider the strategies for investing

You are thinking of investing in a stock that is selling for $60 and that you think will go up in price over the next six months. The six-month call option with exercise price = $60 sells for a premium of $5. The risk-free rate is 1% annually. Consid..

  The financial leverage multiplier is affected

The "financial leverage multiplier" is affected by:

  Deduct the interest paid for tax purposes

On January 1, 2013, your brother's business obtained a 30-year amortized mortgage loan for $350,000 at a nominal annual rate of 7.35%, with 360 end-of-month payments. The firm can deduct the interest paid for tax purposes. What will the interest tax ..

  What is the future value

What is the future value of $750 deposited for one year earning an 8 percent interest rate annually?

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