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Assume that you have $100,000 invested in a stock whose beta is .85, $200,000 invested in a stock whose beta is 1.05, and $300,000 invested in a stock whose beta is 1.25. What is the beta of your po
The required rate of return is 10%. What is a fair price for the investment - assuming the discount rate and expected cash flows don't change - exactly 3 years from today. (In other words, what woul
You are quoted two loan rates: 1) a 9% APR with weekly compounding and 2) a 9.2% APR with yearly compounding. Which one is truly the better offer? Do the necessary calculations to support your answe
selling general and administrative expenses totaled $1,416,400 for the year, and cost of goods sold was $10,963,600 for the year. Assuming a federal income tax rate of 34%, what was the Delta Ray
A life insurer owes $550,000 in 8 years. To fund this outflow the insurer wishes to buy strips that mature in 8 years. The strips have a $5,000 face value per strip and pay a 6% APR with semiannua
Now assume that short sales are not allowed. (What does this mean for portfolio weights?) Suppose the correlation of returns on the two securities is +1.0, what is the optimal combination of securit
Stone Sour Corp. issued 15-year bonds 2 years ago at a coupon rate of 7.90 percent. The bonds make semiannual payments. If these bonds currently sell for 109 percent of par value, what is the YTM?
A Japanese company has a bond outstanding that sells for 96 percent of its ¥100,000 par value. The bond has a coupon rate of 6.30 percent paid annually and matures in 19 years.
Ninja Co. issued 15-year bonds a year ago at a coupon rate of 8.1 percent. The bonds make semiannual payments. If the YTM on these bonds is 6.4 percent, what is the current bond price?
Calculate the EAR for First National Bank and First United Bank.
The Maybe Pay Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $28,000 per year forever. If the required return on this investment is 5.80 percent, how
You want to have $82,000 in your savings account 13 years from now, and you're prepared to make equal annual deposits into the account at the end of each year. If the account pays 7.30 percent inter
What would have been the benfits of delaying investments? What would have been the costs?
Repeat the process but assume that the second share was purchased for $110 instead of $130. Why do the rates of return differ?
How does the business model for cloud computing differ from the traditional business model use by companies such as Microsoft? What are the implications of this new business model for Microsoft's f
What equal annual ammount must Garrett save at the end of each year (the first deposit will occur on his 31st and the last deposit will occur on his 60th birthday) to meet these retirement goals?
You sold a security for $980 that you purchased five years before for $795. What was the holding period return? Prove that this return overstates the annualized, compound return. Please explain how
If Microsoft does not build a cloud computing system business, what might happen to the company over the next decade? Why did the company decide that it had little choice but to invest in cloud com
Suppose you just won the state lottery, and you have a choice between receiving $2,550,000 today or a 20 year annuity of $250,000, with the first payment coming one year from today. What rate of re
Your aunt Ruth has $500,000 invested at 6.5%, and she plans to retire. She wants to withdraw $40,000 at the beginning of each year, starting immediately. How many years will it take to exhaust her
Suppose that Community Bank offers to lend you $10,000 for one year at a nominal interest rate of 8.00%, but you must make interest payments at the end of each quarter and then pay off the $10,000 p
How sensitive is the NPV to changes in the price of the new smart phone?
A company whose charter authorize 10 million shares, has sold 6 million to the public. Of these, 5 million are in the hands of investors today.