The Chinese central bank maintained a firm peg of the yuan to the U.S. dollar at 8.27 yuan/$ from 1996 until July 21, 2005 when the yuan was revalued upward by 2.1%. At the same time the yuan became pegged to an undisclosed, trade-weighted basket of currencies. During 2003 and 2004 pressure had been building in the U.S. Congr
Provide a pervasive argument that is win-win for NECI that the Executive Team agrees that the CFO can hire a staff accountant immediately at $45,000 - $50,000 per year. (See attached files for full problem description).
9.) The stock of Pills Berry Company is currently selling at $60 per share. The firm pays a dividend of $1.80 per share. a.) What is the annual dividend yield? b.) If the firm has a payout rate of 50 percent, what is the firm's P/E ratio? 11.) Ms. Queen is in a 35 percent marginal tax bracket. If Ms. Queen receives $3.80
You have been asked to write a training document about the US Bond Market for use in the new employee training program. In your document, you must make sure to address each of the following: 1) the key players in the market; and the types of investments available to both individual investors and institutional investors,
You have been asked to write a training document about the US Bond Market for use in the new employee training program. In your document, you must make sure to address each of the following: 1. the key players in the market; and the types of investments available to both individual investors and institutional investors,
1. If one of your stocks has a relatively high beta of 1.4 and is currently doing exceedingly well, why would you want a stock in your portfolio with a relatively low beta of 0.7 that has been recently under-performing? By diversifying your investments according to betas, have you entirely removed the potential risk of losses d
Suppose the expected returns and standard deviations of stocks A and B are E(RA) = 0.17, E(RB) = 0.27, StdDevA = 0.12, and StdDevB = 0.21, respectively. a. Calculate the expected return and standard deviation of a portfolio that is composed of 35% A and 65% B when the correlation between the returns on
A corporation's assets are currently worth $1,030. In one year, they will be worth either $1,000 or $1,300. The risk-free interest rate is 4%. Suppose they have an outstanding debt issue with a face value of $1,000. This debt is due in one year. a. The value of the equity is $____?. (Rounded to 2 decimal places.) b. The
T-bills currently yield 5.7 percent. Stock in Nina Manufacturing is currently selling for $56 per share. There is no possibility that the stock will be worth less than $49 per share in one year. (Round answers to 2 decimal places. If the answer is zero, input as "0".) a. The value of a call option with an exercise price of $4
Mr. and Mrs. Smith plan to buy a house in the near future. Their dream house costs $240,000 and will be available in a year. The Smiths currently hold $250,000 in 2,500 shares of Company A. Their financial advisor tells them that they have three options to preserve at best the value of their investment: (1) create a protecti
Stock A currently trades at $50 a share. At the end of the year, it can either be up by a factor u = 1:3 or down by a factor d = 0:5. What is the price of a one-year call option with exercise price X = $55 if the (risk-free) interest rate is r = 10%?
Six years ago, Rollo Inc. granted a nonqualified stock option to Mrs. Jacques to buy 5,000 shares of Rollo stock at $15 per share for six years. At the date of grant, Rollo stock was selling on the AMEX for $14.75 per share. This year, Mrs. Jacques exercised the option when the price was $45.10 per share. What formulas can I
Has managed care influenced or changed the ways in which healthcare providers make medical decisions? Why or why not?
5. Suppose that the pension you are managing is expecting an inflow of funds of $100 million next year and you want to make sure that you will earn the current interest rate of 8% when you invest the incoming funds in long term bonds. How would you use the futures market to do this? 6. How would you use the options market to
Why would an investor buy an option to either buy or sell a stock? What is the purpose of a futures contract? What is the difference between an option contract and a futures contract?
Please see question on attached excel spreadsheet. 17. Option versus Stock: You've located the following option quote for Eric-Cartman, Inc. (ECI): Call Put Option/ Strike Exp. Vol. Last Vol. Last ECI Â 10 Sep 29 5.5 ... ... 20.25 Â Â 15 Sep 333 7 69 1 20.25 Â 25 Dec 5 2 ... ... 20.25 Â 30
Ed Delahanty purchased 500 shares of Niagara Corporation stock on margin at the beginning of the year for $30 per share. The initial margin requirement was 55%. Ed paid 13% interest on the margin loan and never faces a margin call. Niagara paid dividends of $1 per share during the year. 1. At the end of the year, if Ed so
Question #1 Which of the following is NOT true for the writer of a put option? a. the maximum loss is limited to the strike price of the underlying asset less the premium. b. the gain or loss is equal to but of the opposite sign of the buyer of a put option c. the maximum gain is the amount of the premium d. all of the ab
At the recent shareholders' meeting, the CEO of a small bank proposed a plan to offer each of its employees 250 incentive options for Class A common stock. The key provisions of the plan are that employees must exercise the options between January 2004 and December 2007, and if an employee terminates his or her employment with t
(See attached file for full problem description) --- 1. You are forming an equally weighted porfolio of stocks... 2. What spot and forward rates are embedded... ---
Using Intel's stock (ticker symbol = INTC): http://finance.yahoo.com/q/op?s=INTC 1) What is the PUT OPTION with a strike (exercise) price that expires in approximately 3 months? 2) Graph the payoff at expiration (on the vertical axis) to the holder of a call option on a stock with an exercise price of $50.00 3) Graph t
I need to know how to set up two equations for two unknowns,based on the equation for a portfolio standard deviation. My algebra is rusty. I need to know how to rearrange the problem to solve for a, then b=(1-a), I've calculated the standard deviations for both stocks individually, but again I don't remember how to rearran
STOCKS A AND B The data that follow (and in file STOCK AB) give the rates of return over a 50-year period for two stocks, which we'll call stock A and stock B. The rate of return is defined as the increase in value of the portfolio (including any dividends or other distributions) during the year divided by its value at the b
You have been asked to write a report for a group of new stockbrokers about the American Stock Exchange and the NASDAQ. Visit both the American Stock Exchange (AMEX): http://www.amex.com, and the NASDAQ: http://www.nasdaq.com, and write a 2-3 page paper on how the two exchanges operate. Make sure to address the following three q
4 Questions for you to familiarize with option and warrants, especially the Call/Put Parity, formula and relations. Question 1 Pintail's stock price is currently $200. A one-year American call option has an exercise price of $50 and is priced at $75. How would you take advantage of this great opportunity? Now suppose the op
Please provide detailed explanations for the following: Under what circumstances would you recommend options as a risk reducing strategy? What are some possible strategies that a firm can use to protect against exchange rate risks?
What are some hedging strategies a company can use to reduce risk? Please explain in detail. Thanks!
Assume that a speculator purchases a put option on British pounds (with a strike price of $1.50) for $.05 per unit. A pound option represents 31,250 units. Assume that at the time of the purchase, the spot rate of the pound is $1.51 and continually rises to $1.62 by the expiration date. The highest net profit possible for the sp
Macomb Corporation is a U.S. firm that invoices some of its exports in Japanese yen. If it expects the yen to weaken, it could _______ to hedge the exchange rate risk on those exports. sell yen put options buy yen call options buy futures contracts on yen sell with futures contracts on yen
Please provide answers to these questions involving: Probability Distribution of Forecasts and Forecasting with a Forward Rate (attached). Please provide some details explaining answers so that I can study from them . Thanks.