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What if rates suddenly fall by 2 percent instead? What does this problem tell you about the interest rate risk of lower-coupon bonds?
The interest rate is 8% compounded semi-annually. Find the outstanding balance of the loan after the fourth payment has been made.
Say you have two bonds, bond A and bond B. Bond A has a coupon rate of 5%. What is the dollar duration of Bond A? What is the dollar duration of Bond B?
What must the producer give and read to the applicant no later than at the time of application?
Value a call option with strike price $105, expiring in 2 years, where the underlying at time 0 has a sport price. Calculate the value of this call option.
Explain why the stock is in either an uptrend or downtrend. Convince your peers either to invest in your chosen company or not invest in the company.
The spot price of sunflower oil is €20 per barrel storing each barrels costs 2€ payable. What is an upper bound for the one-year futures price of sunflower oil?
Steed & Co. is an all equity firm. At the end of the current year, the CFO expects EBIT to be $5M and the same earnings. What is the value of E.Peel's equity?
Discuss the factors that are relevant in the choice for a large multinational between borrowing funds on the domestic markets or international markets.
Explain the twin deficit phenomenon in a theoretical way. You can assume that initially economy at equilibrium point without any internal or external deficit.
The firm can borrow at a 9% rate and pays a 25% federal-plus-state tax rate. The lease qualifies as a tax-oriented lease. What is the cost of leasing?
What is Avicorp's pre-tax cost of debt? Note: Compute the effective annual return. If Avicorp faces a 40% tax rate, what is its after-tax cost of debt?
What is the expected risk premium earned by bond traders? What factors can help to explain the magnitude of the expected risk premium calculated?
Cash sales, $620,000 Credit sales, $1,520,000 Selling and administrative expenses, $500,000 Sales returns and allowances. How much is Newark's cost of sales?
The client asks you about replacing the passively managed ETFs. Discuss the pros and cons of actively managed mutual funds vs. passively managed ETFs.
The bonds make semiannual payments. If the YTM on these bonds is 5.2%, what is the current bond price?
What do each of the ratios you have indicated mean? How could the ratios indicate the problems in the company?
Based on your analysis, should the company expand and open new branch? Under what circumstances will IRR and NPV rules lead to the same accept-reject decisions?
Suppose Josiah has an auto insurance policy that has a $600 deductible. How much will the insurance company pay out on the policy?
If you instead want to receive an equal dividend for each of the next two years, show how you might go about creating an artisanal dividend.
If the profits for the year are $150,000, what is the amount of expenses in permitted capital if there is no issuance of new equity?
Name (from your textbook) the 4 types of Flexible Work Week arrangements. Please describe one advantage and one disadvantage of each one.
What value of N is needed to get the price from the tree within a cent to the true Black Scholes-Merton price?
List all attributes of each account: APR, Rate, payment, terms.
Compute the yield to maturity (YTM) of a zero-coupon bond with nine years to maturity and currently selling at 45%.