Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
1. A company has a $37 million stock portfolio with a beta of 1.2. The S&P index futures price is currently standing at 1000. Futures contracts on $250 times the index can be traded. How many contracts is needed to reduce the beta to 0.8? If a short position is needed, report a negative number. (margin of error = +/- 1)
2. The price of a stock is $36 and the price of a three-month call option on the stock with a $36 strike is $3.60. Suppose a trader has $3,600 to invest and is trying to choose between buying 1,000 options (10 contracts) or 100 shares of stock. How high does the stock price have to rise for an investment in options to be as profitable as an investment in the stock?
3. A trader writes 100 European put options (1 contract) with a strike price of $50 and a time to maturity of six months. The price received for each option is $4. At expiration, the price of the underlying asset becomes $42. Calculate the trader's gain. If loss, report a negative number.
4. 3-yr interest rate is 5.9% and 4-yr interest rate is 6.2% (both continuously compounded). What is the forward rate (continuously compounded) for the fourth year (between yr-3 and yr-4)? Report in % and round the number to the nearest 2 decimal percentage points such as 5.78%. (margin of error = +/- 0.05%)
Friendly’s Quick Loans, Inc., offers you $6.00 today but you must repay $7.85 when you get your paycheck in one week (or else). What is the effective annual return Friendly’s earns on this lending business? If you were brave enough to ask, what APR w..
The liquidity premium theory of the term structure helps explain why on average, the Treasury yield curve typically slopes upward. The liquidity premium theory relies on the fact that the longer the maturity, the less liquid the bond and thus, the hi..
The IRS is revaluating the asset life categories used for ACRS depreciation. The trucks that JK Industries use are currently classified by the IRS as having an asset life of 7 years. Because these trucks actually last for 10 years, the firm’s manager..
International trade agreements eliminate trade barriers between countries, promote investments, infuse competitiveness, enhance productivity, create jobs, and provide consumers with a greater range of options at cheaper prices.
A common stock currently has a beta; of 1.3, the risk-free rate is an annual rate of 6 percent, and the market return is an annual rate of 12 percent. The stock is expected to generate per-share benefits of $5.20 during the coming period. A toxic spi..
The dividend for Weaver, Inc., is expected to grow at 15 percent for the next 4 years before leveling off at a 5.4 percent rate indefinitely. If the firm just paid a dividend of $1.09 and you require a return of 11 percent on the stock, what is the m..
Ashes Divide Corporation has bonds on the market with 12 years to maturity, a YTM of 6.6 percent, and a current price of $1,296.50. The bonds make semi annual payments. What must the coupon rate be on these bonds?
Clark Communications has a capital structure that consists of 70% common stock and 30% long-term debt. In order to calculate Clark's WACC, an analyst has accumulated the following information: The company currently has a 30-year bond issue outstandin..
You purchased a commercial building and lot for $340,000 on May 4th, 2014. The lot itself was valued at $85,000 when purchased. You sold the lot and building for $400,000 on March 15th of 2015. Use MACRS depreciation and note that this property is co..
Assume that a customer borrows $230,000 for one year from your bank. As a loan officer, you offer the customer the loan if they agree to pay $19,500 in interest, plus agree to pay the $230,000 back at the end of one year. What is the APR? At what dis..
Abbott Lab made $2.80 net income per share last year and paid out $1.30 in dividend. The company had a book value (or equity) per share of $20. The market has a risk free rate of 3.1% and market return 11.1%. Abbott has a historical beta of .90. Wh..
The financial advisors of RBM suggests that the cost of funds to evaluate the proposals is eight per cent. Analyse the two payment possibilities and determine which one you would accept as a manager of RBM.
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd