Financial literacy

2. You are the writer of a put option on Apple Inc. common stock. The option has

2. You are the writer of a put option on Apple Inc. common stock. The option has an exercise price of $122 and the stock is currently trading at $124.70. The option premium is $3.…

2. You are thinking about buying a bond and you want to consider your interest r

2. You are thinking about buying a bond and you want to consider your interest rate exposure. The bond in question is a semiannual note issued by Bank of America that has a $1,000…

2. You are thinking about buying a bond and you want to consider your interest r

2. You are thinking about buying a bond and you want to consider your interest rate exposure. The bond in question is a semiannual note issued by Bank of America that has a $1,000…

2. You are trying to decide whether to buy a $2,500 motorcycle on credit or to s

2. You are trying to decide whether to buy a $2,500 motorcycle on credit or to save money to buy it in 30 months. If you buy on credit, you will make 30 equal end-of-month payment…

2. You are valuing multiple steady-state companies in the same industry. Company

2. You are valuing multiple steady-state companies in the same industry. Company A is projected to earn $160 in EBITA, grow at 2 percent per year, and generate ROICs equal to 15 p…

2. You are valuing multiple steady-state companies in the same industry. Company

2. You are valuing multiple steady-state companies in the same industry. Company A is projected to earn $160 in EBITA, grow at 2 percent per year, and generate ROICs equal to 15 p…

2. You borrow S10,000 to pay for your expected college costs over the next four

2. You borrow S10,000 to pay for your expected college costs over the next four years, including a master degree. Two years from now, you determine that you need an additional S4,…

2. You buy a hotel today for $15 Million. The capital stack is as follows: $5 Mi

2. You buy a hotel today for $15 Million. The capital stack is as follows: $5 Milion is equity (cash out) and the remaining $10 Million is debt. You expect your NOI for year 3 to …

2. You buy a one-year debt security on December 31, 2016, for $10,000, which wil

2. You buy a one-year debt security on December 31, 2016, for $10,000, which will pay you a nominal interest rate of 5%. From December 31, 2016, to December 31, 2017, the inflatio…

2. You can buy or sell a 5.0% coupon $10,000 par U.S. Treasury Note that matures

2. You can buy or sell a 5.0% coupon $10,000 par U.S. Treasury Note that matures in 12.5 years. The first coupon payment pays 6 today, and the Note pays coupons semi-annually unti…

2. You decide to help Mark with his analysis. A good fax machine will cost $500

2. You decide to help Mark with his analysis. A good fax machine will cost $500 and functions properly for five years. The phone company charges $300 for installing a new line and…

2. You have a portfolio of the following options right now: 1) 1 long call optio

2. You have a portfolio of the following options right now: 1) 1 long call option with X=50; 2) 2 short calloptions with X=55; and 3) 1 long call with X=62. The current stock pric…

2. You have been asked to value Oneida Steel, a midsize steel company. The ?rm r

2. You have been asked to value Oneida Steel, a midsize steel company. The ?rm reported $80 million in net income, $50 million in capital expenditures, and $20 million in deprecia…

2. You have looked at the current financial statements for Reigle Homes, Co. The

2. You have looked at the current financial statements for Reigle Homes, Co. The company has an EBIT of $3,070,000 this year. Depreciation, the increase in net working capital, an…

2. You just bought a newly issued bond which has a face value of $1,000 and pays

2. You just bought a newly issued bond which has a face value of $1,000 and pays its coupon once annually. Its coupon rate is 6%, maturity is 20 years and the yield to maturity fo…

2. You purchased a zero-coupon bond that has a face value of $1,000, five years

2. You purchased a zero-coupon bond that has a face value of $1,000, five years to maturity, and a yield to maturity of 7.3%. It is one year later and similar bonds are offering a…

2. You should accept both projects since both of their PIs are positive. You sho

2. You should accept both projects since both of their PIs are positive. You should accept project A since it has the higher PI. You should accept both projects since both of thei…

2. Your company plans to outsource the printing and copying function. You have b

2. Your company plans to outsource the printing and copying function.  You have been asked to evaluate this proposal.  You have gathered the following information. Your company pl…

2. Your company wants to launch a new product. R&D; (including prototypes and ma

2. Your company wants to launch a new product. R&D; (including prototypes and manufacturing process development will take 1 year and cost $60.000. You will need a special meas…

2. Your company wants to launch a new product. R&D; (including prototypes and ma

2. Your company wants to launch a new product. R&D; (including prototypes and manufacturing process development will take 1 year and cost $60,000. You will need a special meas…

2. Your firm has faces the following investment alternatives, and can only selec

2. Your firm has faces the following investment alternatives, and can only select one project. Project A Project B Project C Project D Project E Time 0 -10,000 -10,000 -10,000 -10…

2. Your firm is preparing to open a new retail strip mall and you have multiple

2. Your firm is preparing to open a new retail strip mall and you have multiple businesses that would like lease space in it. Each business will pay a fixed amount of rent each mo…

2. Your stockbroker has called has called you about Netflix, Inc. (NFLX). She te

2. Your stockbroker has called has called you about Netflix, Inc. (NFLX). She tells you that Netflix is selling for $370.00 per share and that she expects the price in one year to…

2. Your stockbroker has called has called you about Netflix, Inc. (NFLX). She te

2. Your stockbroker has called has called you about Netflix, Inc. (NFLX). She tells you that Netflix is selling for $370.00 per share and that she expects the price in one year to…

2. Your uncle died last year and left you money in his will. You are to receive

2. Your uncle died last year and left you money in his will. You are to receive $300,000 five years from today (i.e., in time 5).    (a) What is the value of the inheritance today…

2. Zellers, Inc. is considering two mutually exclusive projects, A and B. Projec

2. Zellers, Inc. is considering two mutually exclusive projects, A and B. Project A costs $75,000 and is expected to generate $48,000 in year one and $45,000 in year two.  Project…

2. [Linear Programming – Model Formulation (10 pts)] Eastern Alabama Trust inves

2. [Linear Programming – Model Formulation (10 pts)] Eastern Alabama Trust invests in various types of securities. A financial advisor there is about to build an investment portfo…

2. [Linear Programming – Model Formulation (10 pts)] Eastern Alabama Trust inves

2. [Linear Programming – Model Formulation (10 pts)] Eastern Alabama Trust invests in various types of securities. A financial advisor there is about to build an investment portfo…

2. a. A $1,000 bond has a 7.5 percent coupon and matures after 10 years. If curr

2. a. A $1,000 bond has a 7.5 percent coupon and matures after 10 years. If current interest rates are 10 percent, what should be the price of the bond? b. If after six years inte…

2. a.Quantitative Problem: Potter Industries has a bond issue outstanding with a

2. a.Quantitative Problem: Potter Industries has a bond issue outstanding with an annual coupon of 6% and a 10-year maturity. The par value of the bond is $1,000. If the going ann…

2. changing the credit period Making changes to a firm?s credit policy involves

2. changing the credit period Making changes to a firm?s credit policy involves trade-offs. Assuming that all other factors remain constant, which of the following are outcomes ex…

2. choose whether each of the descriptions are either disposition effect, repres

2. choose whether each of the descriptions are either disposition effect, representativeness bias, regret avoidance, conservatism bias or mental accounting. a. Investors are slow …

2. if you go to a bank and apply for an installmetloan,you are trying yo get ___

2. if you go to a bank and apply for an installmetloan,you are trying yo get _____ credit. a)loan b)trade c)sales d)trust 5. _____ is a benefit of credit. a) establihing a credit …

2. operating cash flows and depreciation Aa Aa McDermott Technologies is evaluat

2. operating cash flows and depreciation Aa Aa McDermott Technologies is evaluating a new project that requires $800,000 in new equipment. McDermott estimates that the new project…

2. that are assumed to explain stock returns: 1. Departures of GNP growth from e

2. that are assumed to explain stock returns: 1. Departures of GNP growth from expectations (Factor 1): beta 1.5 2. Unanticipated inflation (Factor 2): beta - 0.9 3. Market factor…

2. that are assumed to explain stock returns: 1. Departures of GNP growth from e

2. that are assumed to explain stock returns: 1. Departures of GNP growth from expectations (Factor 1): beta 1.5 2. Unanticipated inflation (Factor 2): beta - 0.9 3. Market factor…

2. the dividend exclusion for corporations receiving dividends from another corp

2. the dividend exclusion for corporations receiving dividends from another corporation has resulted in a. stock investments being relatively less attractive, relative to bond inv…

2. value 3.00 points Exercise 19-5 Algo A portfolio manager invested $1,100,000

2. value 3.00 points Exercise 19-5 Algo A portfolio manager invested $1,100,000 in bonds in 2007. In one year the market value of the bonds dropped to $1,080,000. The interest pay…

2. value: 1.00 points An investment project costs $10,000 and has annual cash fl

2. value: 1.00 points An investment project costs $10,000 and has annual cash flows of $2,800 for six years.    What is the discounted payback period if the discount rate is zero …

2. value: 1.00 points Pendergast, Inc., has no debt outstanding and a total mark

2. value: 1.00 points Pendergast, Inc., has no debt outstanding and a total market value of $150,000. Earnings before interest and taxes, EBIT, are projected to be $28,000 if econ…

2. value: 7.00 points Metallica Bearings, Inc., is a young start-up company. No

2. value: 7.00 points Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next nine years, because the firm needs to plow back i…

2. value: points 12.50 Problem 9-5 Calculating Discounted Payback [LO3] An inves

2. value: points 12.50 Problem 9-5 Calculating Discounted Payback [LO3] An investment project costs $10,000 and has annual cash flows of $2,880 for six years. What is the discount…

2.) A stock index currently stands at 500. The risk-free interest rate is 5 perc

2.) A stock index currently stands at 500. The risk-free interest rate is 5 percent per annum (with continuous compounding) and the dividend yield is 3 percent per annum.   What s…

2.) Charlie Corporation has two bonds outstanding. Both bonds mature in 10 years

2.) Charlie Corporation has two bonds outstanding. Both bonds mature in 10 years, have a face value of $1,000, and have a yield to maturity of 8%. One bond is a zero coupon bond a…

2.) Suppose that annualized interest rates on 3-month CD’s in the U.S. are .375%

2.) Suppose that annualized interest rates on 3-month CD’s in the U.S. are .375% while in the Australia annualized interest rates on 3 month deposits are 1.10% a.) What must curre…

2.) The Robinson Company has the following current assets and current liabilitie

2.) The Robinson Company has the following current assets and current liabilities for these two years: 2010 2011 Cash and marketable securities $ 50,000 $ 50,000 Accounts receivab…

2.) Thress Industries just paid a dividend of $1.50 a share (i.e., D0 $1 50). Th

2.) Thress Industries just paid a dividend of $1.50 a share (i.e., D0 $1 50). The dividend is expected to grow 5% a year for the next 3 years and then 10% a year thereafter. What …

2.)Brittany bought a discount bond issued by the State of California with a matu

                    2.)Brittany bought a discount bond issued by the State of California with a maturity value of $20,000. The discount rate was 3.19% and the term was 175 days.  …

2.)Brittany bought a discount bond issued by the State of California with a matu

                    2.)Brittany bought a discount bond issued by the State of California with a maturity value of $20,000. The discount rate was 3.19% and the term was 175 days.  …

2.00 points Even though most corporate bonds in the United States make coupon pa

2.00 points Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German com…