Smith earned during the time he held the t-bill

Assignment Help Financial Management
Reference no: EM13338019

1: Smith buys a 182-day US T-Bill at a price which corresponds to a quoted annual rate of 182-day T-Bills of 10%. 91 days later smith sells the T-Bill at which time the prevailing quoted annual discount rate of 91-day T-Bills is also 10%. Find the actual rate of return (91-day interest rate) that Smith earned during the time he held the T-Bill.

2: Bob Borrow 1000 from Ed at effective annual interest rate i, agreeing to repay in full at the end of one year. When the year is up Bob has no money but they agree that he can repay one year later in such a way that the effective annual discount rate d in the second year is numerically equal to the interest rate i in the first year. At the end of the second year Bob pays 1200. What is i in the first year?

Reference no: EM13338019

Questions Cloud

Return characterized by probability distribution given file : Suppose that one of your colleagues has $2000 available to invest.Assume that all of this money must be placed in one of threeinvestments: a particular money market fund, a stock, or gold. Eachdollar your colleague invests in the money market fund ea..
Strategy that maximizestechwares expected net revenue : Techware Incorporated is considering the introduction of two newsoftware products to the market. In particular, the company hasfour options regarding these two proposed products: Techware Incorporated is considering the introduction of two newsoftwar..
What is the weighted average cost of capital wacc : What is the weighted average cost of capital WACC
Maximizes landowners expected net earnings from opportunity : A local energy provider offers a landowner $180,000 for theexploration rights to natural gas on a certain site and the optionfor future development. This option, if exercised, is worth anadditional $1,800,000 to the landowner, but this will occur onl..
Smith earned during the time he held the t-bill : Smith buys a 182-day US T-Bill at a price which corresponds to a quoted annual rate of 182-day T-Bills of 10%. 91 days later smith sells the T-Bill at which time the prevailing quoted annual discount rate of 91-day T-Bills is also 10%. Find th..
What terminal-instrumental values are likely to be important : How would you characterize Jeffery Immelt’spersonality & What terminal and instrumental values are likely to be important to him.
Differentiate between short range planing-long rangeplaning : Differentiate between short range planing and long rangeplaning and also explain the different role of managers.
Expalin the needs of short range-intermediate range : Expalin the needs of short range, intermediate range and longrange objectives of an organization? also please mention the time frame used to differentiate these objectives?
Portfolio weightings : what rate of return would you expect to earn from each of the portfolios?

Reviews

Write a Review

Financial Management Questions & Answers

  Explain what does this indicate the firm''s expected ebitda

Assume that in five years, DigiVault will have an expected exit enterprise value of $48 million, based on an EBITDA multiple of 5.0 from similar exit transactions. What does this indicate the firm's expected EBITDA will be at that time?

  Wal-mart company financial analysis

Wal-Mart company Financial analysis

  What factors affect a firms exposure to exchange-rate risk

What are Diva's projected profits for the fiscal year ending September 1995 and what factors affect a firm's exposure to exchange-rate risk? How much exposure to exchange rate risk does Diva Shoes have in April 1995?

  Explain what is the equivalent annual cost of the washer

What is the equivalent annual cost of the washer, if the firm uses straight-line depreciation? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

  Analyse the value of caraways equity

Analyse the value of Caraway's equity if it pays out a $200,000 cash dividend today and plans to pay a $1.2 million liquidating dividend at the end of one year.

  International finance areas

The paper should integrate 4-6 citations and will be evaluated on adherence to the international finance areas, such as the clarity, efficiency, and effectiveness of communication, the appropriate use of financial terms, the level of thought commu..

  How are the inputs transformed into the outputs

Explain how the table below works, i.e., what are the inputs, what are the outputs, and how are the inputs transformed into the outputs and explain how the investment in working capital changes (compared to the amount in Q2a) and why.

  What can be said about first-order autocorrelation

What can be said about first-order autocorrelation given the Durbin-Watson value of 1.8911 calculated from the three factor model residuals?

  What will be the expected return on the firms stock

Buckeye Corp. is currently an all-equity firm with a market value of equity of $100 million. The current expected return on Buckeye''s equity is 25%. Buckeye operates in a world with no taxes.

  Stock valuation and revenue recognition

The validity of the Financial Director's proposed treatment of stock valuation and revenue recognition, referring to relevant International Accounting Standards as appropriate.

  Incremental cash flows

Discuss qualitatively how you might have incorporated the likely growth of digital photography in the sales projections developed above?  (Remember hindsight is 20-20.)

  Prepare the financial statements

Prepare a three page paper that responds to the coca-cola research case questions Using the web, access the Coca-Cola Company's 2010 financial statements

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