Expected return and standard deviation for security, minimum risk portfolio, efficient frontier of the feasible set.
Security A Security B Pa Ra Pb Rb 0.1 -10% 0.1 -30% 0.2 5% 0.2 0 0.4 15%
Security A Security B Pa Ra Pb Rb 0.1 -10% 0.1 -30% 0.2 5% 0.2 0 0.4 15%
The real risk free rate is 3%, and inflation is expected to be 3% for the next 2 years. A 2-year Treasury security yields 6.2%. How would I go about calculating the maturity risk premium for this 2-year security?
Where would I find a comprehensive list of the following public corporate information: 1. Recently announced stock splits that will be paid to shareholders on a future date 2. Upcoming corporate earnings reports
1. A household with very bad credit wants a credit card. Describe two possible options that might be available to them. 2a. If a corporation wants to lend to another corporation in the direct money market and wants to assume no default risk, describe an appropriate investment. 2b. If a SSU wants to lend in the direct money
During its first year of operations Klump Corporation had the following transactions pertaining to its common stock. Jan 10 Issued 70,000 shares for cash at $5 per share July 1 Issued 40,000 shares for cash at $8 per share (a) Journalize the transactions assuming that the common stock has a par value of $5 per sh
Consider the use of probability analysis in estimating returns and determining the standard deviation. You may use a hypothetical situation and do the calculations or just describe the steps in the process.
X Inc. has just paid a dividend of $3.00, and is now selling for $50 per share. Similar stocks generally earn a 13% return. Assuming that X Inc. is a constant growth stock, what is its expected rate of growth?
Project A Project B Initial Investment 100,000 100,000 Year 1 40,000 10,000 Year 2 40,000 10,000 Year 3 40,000 75,000 Year 4 40,000 85,000 1. If the discount rate is 7%, which of the following is true: a. The firm should accept only project A b. The firm should accept only project B c. The firm should accept both p
A proposed project can generate savings of $1000 per year for 10 years. The initial cost of the project is $2500 and the project has a salvage value of $500 in the 10th year. What is the Net Present Value of the project to the nearest dollar if the discount rate is 10%? keywords: NPV
#1. Ace purchases 40 percent of Baskett Company on January 1 for $500,000. Although not used, this acquisition gave Ace the ability to apply significant influence to the operating and financing policies of Baskett. Baskett reports assets on that date of $1,400,000 with liabilities of $500,000. One building with a seven-year
How did the campaign reform legislation (McCain/Feingold) along with the recent legislation capping private donations impact the way interests organizations and institutional elites transact influence in Washington? How does campaign finance reform correlate to Madison's cure for his concerns regarding factionalism?
Lauren has a margin account and deposits of $50,000. Assuming the initial margin requirements is 40%, and The Gentry shoe corporation is selling at $25.00 per share: How many shares can Lauren purchase using the maximum allowable Margin? What are Lauren's profit (loss) and the return on investment if the price of Gentry's st
John Smith, an associate in your firm, has asked you to help him establish a financial plan for his family's future. John is 38 years old and has been with your firm for two years. Anne, his 42 -year-old-wife, is employed as a psychologist for the local school district. They are childless now but plan on adopting a child in two
Please help with the following problem. What are the cash flows associated with calculating the present value of preferred stock? What are the cash flows associated with calculating the present value of common stock? Why is it more difficult to calculate the present value of common stock than it is to calculate the value of
The Optimal Scam Company would like to see its sales grow at 20 percent for the foreseeable future. Its financial statements for the current year are presented below. Income Statement ($ millions) Balance Sheet ($ millions) Sales 32.00 Current assets 16 Costs 28.97 Fixed assets 16 Gross profit 3.03 Total assets 32 Taxes 1
1. Cheryl Colby, the CFO of Charming Florist Ltd., has created the firm's pro forma balance sheet for the next fiscal year. Sales are projected to grow at 10 percent to the level of $330 million. Current assets, fixed assets, short-term debt, and long-term debt are 25 percent, 150 percent, 40 percent, and 45 percent of the tota
1. If a firm pays its bills with a 30 day delay, what fraction of its purchases will be paid for in the current quarter? in the following quarter? what if its payment delay is 60 days? I get the if it was 60 days it would double. What I don't understand is how to figure out the fraction.
Please discuss all of the following as one complete response: What role(s) do financial institutions play in financial intermediation, why are these roles necessary, and how does the company need to respond to the increased intermediation scrutiny due to the company IPO? Explain financial intermediation and the role of finan
Adopting a strategy that includes preserving current assets including developing future growth. Looking at: Property and liability insurance for current lifestyle Healthcare and disability insurance Life insurance and estate planning for dependents Retirement planning
Below are summary cash flow statements for three roughly equal-size companies. ($ millions) A B C Net cash flows from operations
The following accounts appear on the Income Statement and Balance Sheet for a Phoenix-based electronics firm. All figures are in thousands. Arrange these accounts into proper statement format, and supply missing values for the accounts indicated. · Cash $13,637 · Total Curre
I need to figure out how to calculate alpha. All the other calculations are included on the attached. Please show me how to calculate. MARKET Apr-91 13.46% AVERAGE 16.39% Apr-92 10.55% STD. DEV. 10.91% Apr-93 6.08% VARIANCE 1.19% Apr-94 2.44% CO-VAR. 1.07% Apr-95 14.15% Apr-96 27.09% Apr-97 22.50%
Assuming a real risk-free rate of 2% and a MRP +0.1x(t)%, t is the # of years to maturity, estimate the interest rate in Jan 1981 on bonds that mature in 1,2,5 and 20 years, and use Excel to draw a yield curve based on this information.
Sales (30,000 units) $150,000 Variable costs 100,800 Contributions margin $ 49,200 Fixed manufacturing costs 24,000 Operating Income $ 25,200 Interest 18,000 Earnings Before Taxes $ 7,200 Taxes (30%) 2,160 Net Income $ 5,040 Shares Outstanding 600 This firm's break-even point is: A) 4,800 units
1. ABC Company sell for $20 per unit, and the variable cost to produce them is $15. Gateway estimates that the fixed costs are $80,000. a. Compute the break-even point in units. b. Fill in the table below (in dollars) to illustrate that the break-even point has been achieved. Sales _______________ -Fixed costs _____
The Harmon Company manufactures skates. The company's income statement for 2004 is as follows: Harmon Company Income Statement For the Year Ended December 31, 2004 Sales (30,000 skates @ $25 each) $750,000 Less: Variable costs (30,000 skates at $7) 210,000 Fixed costs 270,000 Earnings before interest an
Please help with the following problem. The following are selected 2006 transactions of Yosuke Co.: Jan 1 Purchased a small company and recorded goodwill of $150,000.Its useful life is indefinite. May 1 Purchased for $60,000 a patent with an estimated useful life of 5 yrs. and a legal life of 20 yrs. Instructions:
Calculate the implied volatility of soybean futures prices from the following information concerning a European put on soybean futures: Current futures price 525 Exercise price 525 Risk-free rate 6% per annum Time to maturity 5 months Put price 20
What are the financial applications of business loans, bonds, and treasury notes.
I need to calculate the price for both the best and worst case scenarios. I have attached a spreadsheet with the best and worst cases. I want to calculate each using a discount rate of 9.7% and then also using 11.2%. This is the hint the teacher gave us, but i still cant figure it out: Your first step is to determine the