Inflation was 2% last year. Thomas forecasts that inflation is going to increase to 4% this year. Based on this forecast, Thomas most likely believes that:

The nominal rate will decrease.

The real rate will decrease and the nominal rate will increase.

The real rate will increase.

The real rate will decrease.

The nominal interest rate will increase.

Describe the static trade-off theory : Describe the Static Trade-Off Theory that resulted from a synthesis of the work of M&M and their critics, |

What is rate of return on this investment : By buying this annuity, your agent promises that you will receive payments of $1,225 month for the next 30 years. What is the rate of return on this investment? |

Calculate the cost of common stock and preferred stock : Domelan Van Lines is interested in measuring its cost of capital. Calculated the cost of preferred stock. Calculate the cost of common stock. |

Decrease across the board on all equity securities : Bob is an optomist and he expects the required rate of return to decrease across the board on all equity securities (stocks), |

Forecasts that inflation is going to increase : Inflation was 2% last year. Thomas forecasts that inflation is going to increase to 4% this year. |

The bonds have more interest rate risk : At issue these bonds were rated BBB, but today they are rated AAA. The bonds have more interest rate risk than when they were issued. |

Related to the term structure of interest rates : Which one of the following risk-premiums, by definition, is not related to the term structure of interest rates (i.e. shape of the yield curve)? |

Make an accept-reject decision based on the results in part : Compute the values of i*’s for this project. Make an accept-reject decision based on the results in part |

Treasury debt is lower than yield on five-year treasury debt : You observe that the yield on one-year U.S. Treasury debt is lower than the yield on five-year U.S. Treasury debt. |

## What is the stocks capital gain yieldA company has just paid a dividend of 4.19$. Its discount rate is 8.3%, and the expected perpetual growth rate is 3.8%. What is the stock's Capital Gain Yield? |

## Calculate the value of the Treasury noteAssume that a $1,000,000 par value. semiannual coupon U.S. Treasury note with two years to maturity (YTM) has a coupon rate of 5%. The yeild to maturity of the bond is 8.80%. Using this information and ignoring the other cosr involved, calculate the .. |

## What is the expected dividend per share for next five yearsThe Waterford Corporation just paid a dividend of $1.90 per share. The dividend is expected to grow 3% per year for the next 3 years, then 8% per year thereafter. What is the expected dividend per share for the next 5 years? |

## What is the price of the bonds as percentage of parRamstucky Corp bonds just paid their annual coupon of 4%. What is the price of the bonds as a percentage of par? |

## Identify the type of introductory and concluding techniquesYou are planning to deliver a speech to a group of college freshmen on the topic of how to stick to a budget. Write a paper using the knowledge that you have acquired during the course. Write one page in which you identify the type of introductory an.. |

## Each month into a savings account paying interest at rateThe Pirerras are planning to go to Europe 4 years from now and have agreed to set aside $170/month for their trip. If they deposit this money at the end of each month into a savings account paying interest at the rate of 5%/year compounded monthly, h.. |

## What is firm weighted-average cost of capitalWhat is a firm's weighted-average cost of capital if the stock has a beta of 1.45, Treasury bills yield 5%, and the market portfolio offers an expected return of 14%? In addition to equity, the firm finances 30% of its assets with debt that has a yie.. |

## Determine the total ending value of the investmentAn investor in the United States bought a one-year Brazilian security valued at 195,000 Brazilian reals. The U.S. dollar equivalent was 100,000. The Brazilian security earned 16% during the year, but the Brazilian real depreciated 5 cents against the.. |

## What is return on equityReliable Cars has sales of $4,010, total assets of $3,250, and a profit margin of 5 percent. The firm has a total debt ratio of 42 percent. What is the return on equity? |

## Requires making three annual paymentsIt requires making three annual payments of $1000 each at the end of the next four years. |

## Calculate the amount of money that will accumulateFuture value) Leslie? Mosallam, who recently sold her? Porsche, placed 10,200 in a savings account paying annual compound interest of 77 percent. Calculate the amount of money that will accumulate if Leslie leaves the money in the bank for 33?, 77?, .. |

## Saved for the down paymentYou receive a $12,000 check from your grandparents for graduation. You decide to save it toward a down payment on a house. You invest it earning 9% per year and you think you will need to have $24,000 saved for the down payment. How long will it be b.. |

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