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Get college assignment help at uniessay writers Historical Return and Risk 19. You have just redeemed a zero-coupon bond that you bought 5 years ago. The purchase price of the bond wa. $77.50. i. What is the five-year holding period return (HPR) on the bond? .ii. What is the effective annual rate (EAR) on the bond? ii. You intend to make a large purchase with a credit card. You will not make any payment on the purchase for a year. Your current cards offer the following terms: A.Bank A charges a daily rate of 0.035% B. Bank B charges a weekly rate of 0.255% C. Bank C charges a monthly rate of 1.10 %. a. What is the annual percentage rate (APR) b.What is the effective annual rate (EAR) c. Given the APR in a., if the bank uses continuous compounding, what is the EAR? on each card? on each card? EAR = eAPR- 1 d. Given the EAR in b., if the bank uses continuous compounding, what is the APR? APR In[1 EAR]

Q6 The cument Swiss frane/LUS dollar spot exchenge rate is 2.05 Swiss francs per dollar, or CHFS 205, The espected inlaion over the coming vear is 2 % in Switzerland and 4.5% in the United States. Whe is the expected value for the spot exchange rate a year from now, according to parchasing power parity? (Suppose Switzerland is the forelgn country) (10) 07.The one-ser skfree interest rates are S.5 percent in DC and 3.5 percent in FC. The expected exchange rate apfreciation of FC is 4 percent. What is the foreign curency risk premium? (10)

04 Amme you be 100million GBP2 GBPI-CH2405050 USDI-CHFI61500 (1) GRP-USDLS10/20 So how do you do arbitrage? What is your gain? (10)- Zurich NY London Qs On the Forexuket, you notice the following qaotes Spot $-10s.a0-105.50 One vear interet nte () 3 36–4 % One year interest rate 2% What should e the quote for the one year forward exchange rate S47 (10) %-

02 C der the ou y e e e Lnd Stales E-6.837-.9542 What in the bid prioe? What i the a pri Be midoit price? What is Bid-ask spread?(10 Q iree 3 month frwand exchange ate S 1.23778 and the spot rate is S-1.2550 plee ood c (30 100llioe GBP USDI-CHPI.615060 (1) GBP-USDLS31020 ) 04 Asse s GBPI-CHF24050/60 NY Zurich So how do you do arbitrapr? what is your gain? (10) London

BCO222 Business Finance II SESSION 4: MAKING CAPITAL INVESTMENT DECISIONS CASE 1: Project Evaluation Aria Acoustics, Inc. (AAI), projects unit sales for a new seven-octave voice emulation implant as follows: Year Unit Sales 1 73,000 2 86,000 3 105,000 4 97,000 5 67,000 Production of the implants will require $1,500,000 in net working capital to start and additional net working capital investments each year equal to 15 percent of the projected sales increase for the following year. Total fixed costs are $3,200,000 per year, variable production costs are $255 per unit, and the units are priced at $375 each The equipment needed to begin production has an installed cost of $16,500,000. Because the implants are intended for professional singers, this equipment is considered industrial machinery and thus qualifies as seven-year MACRS property. In five years, this equipment can be sold for about 20 percent of its acquisition cost The tax rate is 21 percent and the required return is 18 percent Based on these preliminary project estimates, what is the NPV of the project? What is the IRR? Year MACRS Percent Depreciation 1 .1429 .1429(110,000) 15,719 2 2449 2449(110,000) 26,939 3 .1749 .1749(110,000) = 19,239 4 .1249 .1249(110,000) 13,739 1 .0893(110,000) = 9,823 .0893 5 .0892(110,000)= 9,812 .0892 6

How are the arts in your community supported by various agencies and citizens? Do you think there is enough or not enough support of the arts by these entities? What is your role in the creation and support of art in your community? I live in Louisville, KY.

Mr. E. Kisan is eager to make his utility function explicit. So he approaches his financial consultant, Mr. Chelumala Rishi Revanth for help who places before Mr. Kisan a choice of a lottery giving either Rs. 10 (say W) or Rs. 100 (say W) with probabilities p and (1-p) respectively. As the value of p is changed Mr. E. Kisan makes a decision and is able to decide on each corresponding values of C (certainty equivalent). The financial consultant, Mr. Chelumala Rishi Revanth, assigns U(W) = W, hence E[U(W)] = p*W, (1-p)*W,. Using this information we have the following table 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9| 1.0 p E[U(W)]100 91 82 73 64 55 46 37 28 |19 10 C What can you say about the characteristics of the utility function of Mr. Kisan? Draw graphs wherever necessary (use graph paper as provided). 110 100 90 75 60 50 35 25 15 10 05

15. On January 15, an office equipment store manager received an invoice for $5,235. The invoice was dated January 13 and had terms 3/15, 2/20, 1/30, n/40. Partial payments are accepted. If $1,000 was paid January 20, $1,500 paid February 1, and $1,200 paid February 14, what was the balance due on February 22? (5 marks)

EQuestion Suppose that on January 1, 2019, the price of a one year Treasury bill-with a face value of S1000-is $936.29. Investors expect that the inflation rate will be 6% during 2019, but at the end of the year, the inflation rate turns out to have been 5% The nominal interest rate on the bill is (Round your response to two decimal places) The expected real interest rate is % Round your response to two decimal places ) The actual real interest rate is %. ( Round your response to two decimal places.)

Suppose that on January, 1, 2013, you purchased a coupon bond with the following characteristics: Face value: $1,000 Coupon rate: 8 3/4 Current yield: 7.6% Maturity date: 2015 %. (Round your response to three decimal places.) If the bond is selling for $850 on January 1, 2014, then the rate of return on this bond during the holding period of calendar year 2013 was

Get college assignment help at uniessay writers PORTFOLIO REQUIRED RETURN Suppose you are the money manager of a $4.05 million investment fund. The fund consists of four stocks with the following investments and betas: Investment Stock Beta 200,000 1.50 A B 640,000 (0.50) C 1,460,000 1.25 D 1,750,000 0.75 If the market’s required rate of return is 9% and the risk-free rate is 5%, what is the fund’s required rate of return? Do not round intermediate calculations. Round your answer to two decimal places.

sing the spread betwen the 0-Day T-bill a 1o year goviment bond DUer the past 4 heer months calealate s it curently upward or d bunvard Sloping Shat does the slope o The curue tell us? rate graph the eld Cra Poes it Signal intlation or 6 secesson2

11. You recently purchased 1000 units of the newly launched University Staff Fund (USF), which had a NAV of $ 1 5.20 per share. USF charged a front-end load of 5%. What was the actual offer price of the fund? What is your breakeven rate of return? ($16.00; 5.26 % )

Table 1. Balance Sheets, PNC and Industry ($ in Thousands) PNC Benchmark Companies % of Assets 2002 2003 2004 $346 $507 $2,017 $3,622 $6,492 $14,512 $21,004 Cash ST securities Accounts receivable Inventories Current assets Net fixed assets Total assets % of Sales $478 $700 $2,786 $5,002 $8,966 $15,208 $24,174 $625 $625 $3,852 $6,023 $11,125 $18,098 $29,223 2.85% 1.00% 0.01% 5.00% 9.00% 15.01% 20.10% 0.01% 14.24% 25.64% 42.74% 57.26% 100.00% 35.11% Accounts payable Accruals Notes payable Current liabilities $353 $478 $399 $541 $0 $940 $7,255 $8,195 $2,130 $7,911 $5,939 $13,849 $24,174 $527 $714 $0 $1,241 $9,239 $10,480 $2,206 $8,510 $8,026 $16,536 $29,223 2.85% 1.41% 0.94% 1.00% 0.50% $0 $831 $4,986 $5,817 $1,890 $8,306 $4,991 $13,297 $21,004 0.33% 5.20% 29.99% 35.19% 3.10% 12.82% 1.83% Long-term debt Total liabilities 10.53% 12.36% 1.09% 4.50% 17.16% 21.66% 35.11% Preferred stock (6%) Common stock Retained earnings Total com equity Total liabs and eqty 48.88% 61.70% 100.00% Table 2. Income Statements, PNC and the Industry (S in Thousands) Benchmark Companies % of Assets 284.86% 254.27% 2004 % of Sales 2003 2002 $82,739 $74,727 3,620 78,347 $4,392 693 $3,699 1,480 132 Sales Revenues Cash op costs Depreciation Total op costs Op Income (EBIT) Interest Taxable Income $47,342 $42,000 3,042 45,042 $2,300 508 100.00% 89.26% 4.50% $31,506 $27,300 2,902 30,202 $1,303 12.82% 267.09% 17.77% 2.28% 93.76% 6.24% 0.80% 5.44% 374 15.49% 6.20% $1,792 717 $929 372 2.18% 0.08% Taxes 0.23% 128 Pfd dividends Net Income Free Cash Flow (FCF) 113 9.07% 3.18% $2,087 $948 $444 N/A N/A $2,187 $1,488 N/A FCF = EBIT(1-T) – (Increase in net operating capital). All assets except ST securities are required in operations, and all current labilities except notes payable are costless. Table 3. Ratios and Other Financial Data Benchmarks 2004 2003 2004 2002 2,589.0 $0.17 $0.00 0% 2,626.2 $0.79 $0.00 0% N/A $21.00 $6.30 26.42 2,600.0 $0.36 $0.00 N/A N/A N/A 20% 8.30% Shares outstanding Earnings per share Dividends per share Dividend payout ratio Dividend growth rate Stock Price, EOY Book value per share P/E Price/Book ratio Economic Value Added (EVA) Market Value Added (MVA) Beta Coefficient Market Risk Premium Risk-Free Rate Tax rate (Federal State) WACC (Estimated values) Free Cash Flow NOPAT Operating costs/Sales Depreciation/Fixed assets Days sales outstanding Receivables/sales Inventory/Sales Fixed assets/Sales Interest rate on all costly debt Preferred dividend yield Debt/Assets Preferred stock/Assets Common equity/Assets EBITDA/Interest Times interest earned (TIE) Current ratio Return on Invested Capital (ROIC) ROE DuPont Analysis: Total assets turnover (TATO) Assets/Common equity Profit margin DuPont ROE EOY stands for End Of Year. BOY would indicate Beginning Of Year. 0% N/A N/A $12.60 $5.33 $10.50 $5.14 N/A N/A 30.1 34.57 61.20 2.37 3.34 2.04 4.2 -$333 $38,614 -$1,057 -$1,346 $13,888 N/A $18,911 N/A 1.62 1.35 1.35 1.42 5.00% 5.00% 5.00% 5.00% 4.80% 4.70% 5.00% 40% 4.80% 40% 40% 40% 10.00% 10.38% 10.38% 10.38% -$2,187 $2,635 94.69% -$1,488 $1,380 95.14% N/A N/A $3.74 $782 95.86% 93.76% 20.0% 20.0% 20.0% 22.4% 23.4 21.5 17.0 18.3 6.4% 5.9% 4.7% 5.0% 11.5% 9.0% 20.1 % 10.6% 7.3% 46.1% 32.1% 21.9% 7.5% 7.0% 6.0% 7.5% 7.0% 6.0% 27.7% 6.0% 6.0% 33.9% 8.8% 57.3% 35.9% 7.6% 35.2% 9.0% 3.1% 63.3% 61.7% 13.4 56.6% 11.6 11.2 10.5 3.5 7.81 7.8 8.20 N/A 4.5 6.3 9.54 5.88% 6.84% 8.97 3.82% 9.22% 3.34% 14.7% 12.62% 1.50 1.58 1.41% 3.34% 1.96 2.83 2.85 1.75 2.00% 6.84% 1.62 1.77 3.18% 14.70% 2.52% 12.62% Valuation Methods Intrinsic (Fundamental) Valuation Discounted Cash Flow (DCF) Relative Valuation Comparable Multiples Market to Book multiple Price to Revenue multiple Enterprise value to EBIT multiple Various valuation methods provide a ‘triangulation’ of convergence towards ‘true value’ of the firm

12b. A no-load mutual fund has $10.00 billion in assets, $60.00 million in operating expenses, $7 million in 12b-1 fees, and 100 million shares at the start of the year. At year-end, the fund has $11.20 billion in assets, $63.80 million in operating expenses, $9 million in 12b-1 fees, and 108 million shares. During the year investors have received income distributions of $0.93 per share, and capital gains distributions of $1.23 per share. Assuming that the fund carries no debt, what is the rate of return on the fund? (NAVo $99.33; NAV-S103.03; RoR-5.90 % ) What is the expense ratio of the fund? (0.66 %)

10.60% ST000,000,666 13b. Consider a mutual fund with $1 billion in assets at the start of the year and 30 million shares outstanding. Ir the gross return on the assets under management is 9% and the total expense ratio is 0.75% of the year-end value, what is the rate of return on the fund? (8.18%)

15. You purchased shares of a mutual fund at a price of $12 per share at the beginning of the year and paid a front- end load of 4.75 %. If the securities in which the fund invested increased in value by 9 % during the year, and the funds expense ratio was 1.5 % , what would be your return if you sold the fund at the end of the year, assuming that the fund does not charge a back-end load? (2.39%)

16. You purchased shares of a mutual fund at a price of $17 per share at the beginning of the year and paid a front- end load of 5.0%. If the securities in which the fund invested increased in value by 12 % during the year, the funds expense ratio was 1.0%, and you have to pay a back-end load of 6% for redeeming all your shares after one year, what would be your return if you sold the fund at the end of the year? (-0.88 % )

17a. The New Tech Fund is a closed-end investment company with a portfolio currently worth $300 million. It has liabilities of $5 million and 9 million shares outstanding, The fund sells for $30 a share. What is its premium or discount as a percent of NAV? (Discount of 8.47%) price – NAV Premium/discount NAV 17b. The GZ Fund is a closed-end investment company with a portfolio currently worth $1 billion. It has liabilities of $17 million and 12 million shares outstanding. The fund sells for $30 a share. What is its premium percent of NAV? (Premium of 12.31 %) or discount as a

18b. A mutual fund sells its Class A shares with a front-end load of 4.75% and total annual expense ratio of 0.85% The fund sells its Class B shares with a 12b-1 fee of 1% and operating expense ratio of 0.60% annually. You invesi $1,000 in the fund and plan to redeem your investment after 3 years. The fund is expected to make 14% annual return. Would you prefer to invest in Class A or Class B shares? (Terminal values: A = $1,379.84, B $1,420.03) 18c. You invest in a mutual fund that charges a 3% front-end load, 1% annual exnense ratio anda 2 which doe

APR= In[1 EAR] 20. Some time ago you invested $50,000 in a managed portfolio of stocks. The portfolio manager created a stock market index to help investors track the performance of the portfolio. The index values w ere as follows: Time Index 0 150 1 172 167 192 4 207 i. What is the HPR on the portfolio? ii. What is the arithmetic average return? ii. What is the geometric average return? iv. What is the standard deviation of returns on the portfolio? v. What is the terminal value of your investment?

The post Question: Historical Return And Risk 19. You Have Just Redeemed A Zero-coupon Bond That You Bought 5 Years Ago. The Purchase Price Of The Bond Wa. $77.50. I. What Is The Five-year Holding Period Return (HPR) On The Bond? .ii. What Is The Effective Annual Rate (EAR) On The Bond? Ii. You Intend To Make A Large Purchase With A Credit Card. You Will Not Make Any … appeared first on uniessay writers.

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November 3, 2019