Financial literacy

You just bought 200 shares of a stock priced at $45 per share using 50% initial

You just bought 200 shares of a stock priced at $45 per share using 50% initial margin. The broker charges 5% annual interest rate on the margin loan and requires a 30% maintenanc…

You just bought a capital asset for $452,400 which is classified by GAAP as a 7-

You just bought a capital asset for $452,400 which is classified by GAAP as a 7-year asset for tax purposes. Using the following MACRS depreciation schedule determine the deprecia…

You just bought a rent house for $200,000, with $40,000 down and the balance in

You just bought a rent house for $200,000, with $40,000 down and the balance in the form of a 15-year amortization mortgage at a fixed rate of 4.0% and monthly payments. Your prin…

You just came back from Canada, where the Canadian dollar was worth $.75. You st

You just came back from Canada, where the Canadian dollar was worth $.75. You still have C$500 from your trip and could exchange them for dollars at the airport, but the airport f…

You just came back from India, where the Indian Rupee was worth $.015. You still

You just came back from India, where the Indian Rupee was worth $.015. You still have INR 50,000 from your trip and could exchange them for dollars at the airport, but the airport…

You just got a call from your uncle indicating he just won $40,000 in the New Yo

You just got a call from your uncle indicating he just won $40,000 in the New York Take Five. He needs some financial advice. The state offers three different payout plans: a: He …

You just got a call from your uncle indicating he just won $40,000 in the New Yo

You just got a call from your uncle indicating he just won $40,000 in the New York Take Five. He needs some financial advice. The state offers three different payout plans: a: He …

You just got a substantial pay raise and decided to move the family into a bigge

You just got a substantial pay raise and decided to move the family into a bigger house. Thus, you are selling your current home, liquidating your mortgage, and using the remainin…

You just graduated from college and have started working. You are 25 yrs old and

You just graduated from college and have started working. You are 25 yrs old and you think you will work for 30 years and retire when you are 55. You wish to save money to provide…

You just graduated from college and have started working. You are 25 yrs old and

You just graduated from college and have started working. You are 25 yrs old and you will work for 30 years and retire when you are 55. You wish to save money to provide for your …

You just graduated from college and have started working. You are 25 yrs old and

You just graduated from college and have started working. You are 25 yrs old and you think you will work for 30 years and retire when you are 55. You wish to save money to provide…

You just graduated from college and have started working. You are 25 yrs old and

You just graduated from college and have started working. You are 25 yrs old and you think you will work for 30 years and retire when you are 55. You wish to save money to provide…

You just graduated, and you plan to work for 10 years and then to leave for the

You just graduated, and you plan to work for 10 years and then to leave for the Australian "Outback" bush country. You figure you can save $1,500 a year for the first 5 years and …

You just inherited $3 million from your aunt. You decide to pursue a career as a

You just inherited $3 million from your aunt. You decide to pursue a career as an artist after graduation and would like to make your inheritance last until you become a critical …

You just now financed a house, and the mortgage is a 10-year, $200,000 mortgage,

You just now financed a house, and the mortgage is a 10-year, $200,000 mortgage, with a single payment made at the end of each year. The interest rate is 5%, which by my calculati…

You just purchased a used car from your local dealership. The dealership has off

You just purchased a used car from your local dealership. The dealership has offered you 3 possible payment options described in the table. If the discount rate is 7.0%, which of …

You just purchased some equipment that is classified as 5-year property for MACR

You just purchased some equipment that is classified as 5-year property for MACRS. The equipment cost $67,600. What will the book value of this equipment be at the end of three ye…

You just received a bonus of $3, 000. a. calculate the future value of $3.000 gi

You just received a bonus of $3, 000. a. calculate the future value of $3.000 given that it will be held in the bank for 6 years and earn an annual interest rate of 3 percent b. R…

You just received a bonus of $4000. a. What is the future value of $4,000 in a b

You just received a bonus of $4000. a. What is the future value of $4,000 in a bank account for 6 years at an annual interest rate of 6 percent? (Round to the nearest cent) $_____…

You just received a bonus of $4000. a. What is the future value of $4,000 in a b

You just received a bonus of $4000. a. What is the future value of $4,000 in a bank account for 7 years at an annual interest rate of 5 percent? (Round to the nearest cent) $_____…

You just received an insurance settlement offer related to an accident you had s

You just received an insurance settlement offer related to an accident you had six years ago. The offer gives you a choice of one of the following three offers:    Option A: $1,56…

You just returned from some extensive traveling throughout the Americas. You sta

You just returned from some extensive traveling throughout the Americas. You started your trip with $10,000 in your pocket. You spent 1.4 million pesos while in Chile. You spent a…

You just sold ten Jan 2015 call option contracts selling at $1.25 on Intel Corp.

You just sold ten Jan 2015 call option contracts selling at $1.25 on Intel Corp. stock (INTC). The options have a strike price of $35.00 and the stock is selling at $34.75 per sha…

You just turned 21 today and you want to save some money to take a vacation in E

You just turned 21 today and you want to save some money to take a vacation in Europe when you turn 25 and spend 2 years there. Starting next month, you will deposit $500 every mo…

You just turned 24 years old and want to retire when you turn 65. You plan to pu

You just turned 24 years old and want to retire when you turn 65. You plan to put $3,700 every year into a ROTH IRA, a retirement account from which you can withdraw money after r…

You just turned 34 years old, and you want to begin saving for retirement at the

You just turned 34 years old, and you want to begin saving for retirement at the end of the year. Assume that you retire in 30 years at age 65, and would like to have an income of…

You just won $50,000 in a lottery. You want to use the money to make a down paym

You just won $50,000 in a lottery. You want to use the money to make a down payment on a house 5 years from now. Meanwhile you want to invest it to accumulate more funds. Bank of …

You just won a $12,000 prize at the local talent show. You can receive the money

You just won a $12,000 prize at the local talent show. You can receive the money all up front (t=0), or choose to get 24 monthly payments, with the first payment starting 6 months…

You just won a lottery that promises to pay you $1 million exactly 10 years from

You just won a lottery that promises to pay you $1 million exactly 10 years from today. Because the $1 million payment is guaranteed by the state in which you live, opportunities …

You just won a lottery—CONGRATULATIONS! Your parents have always told you to pla

You just won a lottery—CONGRATULATIONS! Your parents have always told you to plan for the future, so since you already have a well-paying job you decide to invest rather than spen…

You just won the TVM Lottery. You will receive $1 million today plus another 10

You just won the TVM Lottery. You will receive $1 million today plus another 10 annual payments that increase by $670,000 per year. Thus, in one year you receive $1.67 million. In…

You just won the lottery! Which would you rather have and why? $2,500,00 right n

You just won the lottery! Which would you rather have and why? $2,500,00 right now or $500,000/year for 6 years assuming a 8% required and you are paid installments at the end of …

You just won the lottery! You have two choices for payout of your winnings. You

You just won the lottery! You have two choices for payout of your winnings. You can either choose a payment of $6 million in five years’ time, or a lump sum of $3.8 million right …

You just won the lottery, which promises you $440,000 per year for the next 20 y

          You just won the lottery, which promises you $440,000 per year for the next 20 years.  You receive the first payment today (hint:   annuity due).  If your discount rate …

You just won the lottery, which will pay you $1,000 a year until you pay it off.

You just won the lottery, which will pay you $1,000 a year until you pay it off. The current interest rate is 5%. The first payment happens in 1 year. a) As we know the lottery wi…

You just won the lottery, which will pay you $1,000 a year until you pay it off.

You just won the lottery, which will pay you $1,000 a year until you pay it off. The current interest rate is 5%. The first payment happens in 1 year. a) As we know the lottery wi…

You know that the after-tax cost of debt capital for Bubbles Champagne is 6.30 p

You know that the after-tax cost of debt capital for Bubbles Champagne is 6.30 percent. Assume that the firm has only one issue of five-year bonds outstanding. The bonds make semi…

You know the following. The interest rate in the $ is 10% and in the euro it is

You know the following. The interest rate in the $ is 10% and in the euro it is1 6%. If the spot ER is euro/$ 1 (meaning 1 euro for 1 dollar.) SHOW IN DETAIL what the forward rate…

You likely have read about the Sarbanes-Oxley Act. Why do you suppose Congress p

You likely have read about the Sarbanes-Oxley Act.  Why do you suppose Congress passed this law?  In your opinion, is the law providing any benefit for the average investor?  Do y…

You make $7,200 annual deposits into a retirement account that pays 11.3 percent

You make $7,200 annual deposits into a retirement account that pays 11.3 percent interest compounded monthly How large will your account balance be in 33 years? (Enter rounded ans…

You make a deposit of $1,000 in an account that pays interest at a rate of 12% c

You make a deposit of $1,000 in an account that pays interest at a rate of 12% compounded quarterly. In two years, the balance will be ? A. 1,240.00 B.1,254.40 C.1,266.77 D.1,360 …

You manage a $15 million hedge fund portfolio with beta = 1.2 and alpha = 2% per

You manage a $15 million hedge fund portfolio with beta = 1.2 and alpha = 2% per quarter. Assume the risk-free rate is 2% per quarter and the current value of the S&P 500 Inde…

You manage a pension fund that will provide retired workers with lifetime annuit

You manage a pension fund that will provide retired workers with lifetime annuities. You determine that the payouts of the fund are essentially going to resemble level perpetuitie…

You manage a pension fund that will provide retired workers with lifetime annuit

You manage a pension fund that will provide retired workers with lifetime annuities. You determine that the payouts of the fund are essentially going to resemble level perpetuitie…

You manage a pension fund where payouts are essentially going to resemble a leve

You manage a pension fund where payouts are essentially going to resemble a level perpetuity of $2 million per year. At t = 0 the interest rate is two and a half percent per year …

You manage a portfolio for Ms. B, who has instructed you to be sure her portfoli

You manage a portfolio for Ms. B, who has instructed you to be sure her portfolio has a value of at least $350,000 at the end of six years. The current value of Ms. Greenspan's po…

You manage a portfolio of bonds for the Kentucky Teacher Retirement System. Bond

You manage a portfolio of bonds for the Kentucky Teacher Retirement System. Bonds range in quality from BB to AAA. Coupons range from zero to 8.25%. The average maturity of all bo…

You manage a portfolio of bonds for the Kentucky Teacher Retirement System. The

You manage a portfolio of bonds for the Kentucky Teacher Retirement System. The weighted-average maturity of all bonds in the portfolio is 18.5 years. According to the actuaries, …

You manage a resort and are considering installing one of two different vending

You manage a resort and are considering installing one of two different vending machines, Soda or Candy. The net cash flow for each machine stays the same for each of the four yea…

You manage a risky fund with expected return of 18% and standard deviation of 28

You manage a risky fund with expected return of 18% and standard deviation of 28%. The T-Bill rate is 8%. (Please show your work) a) Your client invests 70% in your risky fund and…