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Why do bubbles and bursts occur in financial markets? In discussing this issue, you need to focus on the rationality of investors, the availability of information to different categories of investor
a. You have accumulated data on three stocks (see below). You have decided to use the information on these stocks to form an index. You want to find the average earned rate of return for 2011 on you
For a given amount, interest rate, and number of years, which of the following will yield the highest number?
What is the maximum amount a company should pay for equipment that it expects will increase its net income and cash flow by $250,000 per year for five years?
What is the present value of an investment that pays $80 at the end of each year for 10 years and pays an additional $1,000 at the end of the tenth year if the required rate of return is 7%? 8%?
The interest rate for the investment is 6%. What will the price of the investment be if it has a life of 5 years? 10 years? 20 years?
Microsoft issued bonds for the first time in 2009. Collect information on its bonds: What are the coupon rates, are there are any special provisions such as callability or convertibility, what is th
Which retirement plan has the highest present value at the beginning of the six-year period? (b) Which option would you recommend?
How much overall risk is there in this firm? Where is this risk coming from (market, firm, industry, or currency)? How is the risk profile changing?
What is the present value of $900 to be received at the end of one year? $1,500? What can you conclude about the effect of the amount expected to be received on its present value?
Compare A, B & C using the different measures. How do you determine which portfolio had the superior return? What other information do you need to decide?
Assume you will receive $1,000 at the end of year 1. What is its present value at the beginning of year 1 if you expect an 8% rate of return?
Demonstrate why you believe the option is mispriced and develop a strategy to take advantage of the mispricing, assume you are correct with your estimate of historical volatility.
A year later interest rates have dropped and the bond"s price has increased to $1,050. What are your nominal and real rates of return? Assume the inflation rate is 4 percent.
Company ABC wants to invest in a Swedish manufacturing company that has an optimal debt ratio of 60%. Company ABC's cost of equity capital is 16% and its before-tax borrowing rate is 12.3%. As the C
A British government perpetuity pays £4 a year forever and is selling for £48. What is the interest rate?
Define the concept of management. Describe the major functions of the management process and why they are important. Describe the roles of the manager as outlined by Mintzberg.
Prove to yourself that it does not matter the point in lime at which you compare the prizes" cash flows: the better prize has both the bigger present value and future value.
How much in new savings will Frank have available at age 65 before subsequent withdrawals? How much will he have to save per year to exactly meet his need?
What is the product, and why do you think it became scarce? What happened to the price of the product when it was scarce?
Valley Corporation is attempting to select the best of a group of independent projects competing for the firm's fixed capital budget of $4.5 million.
Assume that the risk free rate is 10%, and the dividend yield on both the potfolio and the index is 2%. If the portfolio has a beta of 0.5, how many put option contracts should be purchased? If the
The S&P 100 index is currently standing at 500 and each contract is on 100 times the index. If the portfolio has a beta of 1, how many put option contracts should be purchased?
In a merger, we often say that synergies arise, where the value of the whole exceeds the sum of the parts. What could these synergies arise from? Be specific, using supporting examples.
How does government regulation affect a bank's expansion in the global market? What are the possible strategies to deal with those constraints?