Reference no: EM132602558

Questions -

Q1. One-year Treasury bills currently earn 5.85 percent. You expect that one year from now, one-year Treasury bill rates will increase to 6.10 percent. The liquidity premium on two-year securities is .110 percent. If the liquidity theory is correct, what should the current rate be on two-year Treasury securities?

Q2. What's the taxable equivalent yield on a municipal bond with a yield to maturity of 5.50 percent for an investor in the 28 percent marginal tax bracket? (Round your answer to 2 decimal places.)

Q3. Consider a 2.50% TIPS with an issue CPI reference of 185.20. At the beginning of this year, the CPI was 197.40 and was at 202.50 at the end of the year. What was the capital gain of the TIPS in dollars?

Q4. If a preferred stock from Ecology and Environment, Inc. (EEI) pays $6.50 in annual dividends, and the required return on the preferred stock is 6.20 percent, what's the value of the stock?

Q5. On November 27, 2007, The Dow Jones Industrial Average closed at 13,108.44, which was up 290.04 that day. What was the return (in percent) of the stock market that day?

Q6. If you own 650 shares of Air Line Inc at $42.2, 270 shares of BuyRite at $55.45, and 370 shares of Motor City at $9.4, what are the portfolio weights of each stock?

Q7. The past five monthly returns for K and Company are 5.45 percent, 5.62 percent, -.95 percent, -.25 percent, and 10.20 percent. What is the average monthly return?

Q8. A company has a beta of 4.67. If the market return is expected to be 15.70 percent and the risk-free rate is 7.85 percent, what is the company's risk premium?

Q9. A company's current stock price is $85.30 and it is likely to pay a $4.30 dividend next year. Since analysts estimate the company will have a 10% growth rate, what is its expected return?