Financial literacy

1. 4. Calculate the present value of a growing perpetuity that begins payments o

1.                 4.Calculate the present value of a growing perpetuity that begins payments of $100 one year from today and has a required return of 12% and a growth rate of 4%.…

1. Reporter : A new campaign finance reform bill being consider

1. <11{1[2(06)06]}> Reporter: A new campaign finance  reform bill being considered by Congress would limit the amount of campaign  contributions that political candidates ca…

1. Reporter : A new campaign finance reform bill being consider

1. <11{1[2(06)06]}> Reporter: A new campaign finance  reform bill being considered by Congress would limit the amount of campaign  contributions that political candidates ca…

1. A $1000 par value bond with a 8.28 percent coupon rate, currently selling for

1. A $1000 par value bond with a 8.28 percent coupon rate, currently selling for $1135 has a current yield of Round the answer to two decimal places in percentage form. 2. Bright …

1. A $500,000 surface-mount placement machine is being evaluated by a manufactur

1. A $500,000 surface-mount placement machine is being evaluated by a manufacturing engineer. The machine is proposed for use on an assembly line to automatically insert electroni…

1. A 10-month European call option on a stock is currently selling for $5. The s

1. A 10-month European call option on a stock is currently selling for $5. The stock price is $64, the strike price is $60. The continuously-compounded risk-free interest rate is …

1. A 12 -year bond is issued with a face value of $1,000, paying interest of $80

1. A 12 -year bond is issued with a face value of $1,000, paying interest of $80 a year. If market yields increase shortly after the T-bond is issued, what happened to the bond’s …

1. A 20-year, 8% semiannual coupon bond with a par value of $1,000 may be called

1. A 20-year, 8% semiannual coupon bond with a par value of $1,000 may be called in 5 years at a call price of $1,040. The bond sells for$1,100. (Assume that the bond has just bee…

1. A 25-year maturity mortgage-backed bond is issued. The bond has a par value o

1. A 25-year maturity mortgage-backed bond is issued. The bond has a par value of $10,000 and promises to pay an 8 percent annual coupon. Assume that 20 years after the bond is is…

1. A 30-year 6% semi-annual coupon bond has a tenor of 18 years and a yield to m

1. A 30-year 6% semi-annual coupon bond has a tenor of 18 years and a yield to maturity of 7.2%. If the PAR value of the bond is $1000, what is the price of the bond today? 2. A 3…

1. A 5 year US Treasury note with a face value of $10,000 is selling on the mark

1. A 5 year US Treasury note with a face value of $10,000 is selling on the market for $9,472.00. It has 2 years of maturity. Calculate the note's yield to maturity. (no coupon pa…

1. A Canada-based investor buys shares of T0ronto-Dominion Bank (TO) for C$72.08

1. A Canada-based investor buys shares of T0ronto-Dominion Bank (TO) for C$72.08 on 15 October 2007 with the intent of holding them for a year. The dividend rate was C$2.11 per ye…

1. A Company’s perpetual preferred stock sells for $102.50 per share, and pays a

1. A Company’s perpetual preferred stock sells for $102.50 per share, and pays a $9.50 annual dividend. If the company were to issue a new preferred issue, a flotation cost of 4.0…

1. A Thai baht bond with a coupon of 9.5% is initially priced at its face value

1. A Thai baht bond with a coupon of 9.5% is initially priced at its face value of Bt 1,000. At the end of one year, the bond is selling for Bt 1,050. If the initial spot rate was…

1. A Treasury STRIPS matures in 11.0 years and has a yield to maturity of 15.4 p

1. A Treasury STRIPS matures in 11.0 years and has a yield to maturity of 15.4 percent. Assume the par value is $100,000,      a. What is the price of the STRIPS? (Round your answ…

1. A Treasury STRIPS matures in 11.0 years and has a yield to maturity of 15.4 p

1. A Treasury STRIPS matures in 11.0 years and has a yield to maturity of 15.4 percent. Assume the par value is $100,000,      a. What is the price of the STRIPS? (Round your answ…

1. A Treasury bill with 140 days to maturity is quoted at 96.540. What is the ba

1. A Treasury bill with 140 days to maturity is quoted at 96.540. What is the bank discount yield, the bond equivalent yield, and the effective annual return? (Input all amounts a…

1. A Treasury bond futures contract (assume a 6% coupon, semiannual payment with

1. A Treasury bond futures contract (assume a 6% coupon, semiannual payment with 20 years to maturity) has a settlement price of 83'10. What is the implied annual yield? Round you…

1. A U.S. investor has $20,000. This is used to buy a stock in Sweden that costs

1. A U.S. investor has $20,000. This is used to buy a stock in Sweden that costs 100 Swedish krona per share. At this time the exchange rate is $0.11 = 1 Swedish krona. One year l…

1. A U.S. manufacturing company operating a subsidiary in an LDC (less-developed

1. A U.S. manufacturing company operating a subsidiary in an LDC (less-developed country) shows the following results: 19,600 19,550 14,550 20,500 FC 19,550 4,550 100,505 Sales (u…

1. A US$ corporate bond can never have a yield lower than a US government bond w

1.A US$ corporate bond can never have a yield lower than a US government bond with the same maturity. 2.If interest rates rise a 10-year zero coupon bond would fall by about half …

1. A ________ exchange rate is the quoted price for a unit of foreign currency t

1. A ________ exchange rate is the quoted price for a unit of foreign currency to be delivered within a very short period of time. a. foward b. spot 2. The Government does not set…

1. A bank can safely reduce its amount of reserves if: A. there is little chance

1. A bank can safely reduce its amount of reserves if: A. there is little chance that its depositors will make large withdrawals B. it is balanced by a large amount of loans C. th…

1. A bank currently with a 4-year $10 million non-amortizing loan paying 7% inte

1. A bank currently with a 4-year $10 million non-amortizing loan paying 7% interest rate is in negotiations to reschedule its payment terms. The new terms will extend the loan to…

1. A basic 30-year ARM is made for $300,000 with an initial interest rate of 2%.

1. A basic 30-year ARM is made for $300,000 with an initial interest rate of 2%. Payments are monthly. The rate will reset every year. The index is the one-year Treasury and there…

1. A beta value of 0.5 for a security indicates a)the security has average syste

1. A beta value of 0.5 for a security indicates a)the security has average systematic risk b)the security has above-average systematic risk c)the security has no unsystematic risk…

1. A bond has a $1,000 par value, 12 years to maturity, and a 8% annual coupon a

1. A bond has a $1,000 par value, 12 years to maturity, and a 8% annual coupon and sells for $980. a. What is its yield to maturity (YTM)? Round your answer to two decimal places.…

1. A bond is available for purchase at a current market price of $863.73. The co

1. A bond is available for purchase at a current market price of $863.73. The coupon rate is 8% payable annually; the yield to maturity is 10%.   If the par value is $1,000, how m…

1. A bond issue should be refunded when: A. bondholders desire the return of the

1. A bond issue should be refunded when: A. bondholders desire the return of their funds B. it is too expensive to issue additional common stock C. interest rates drop and you bel…

1. A bond manager expects interest rates to decline and has to choose between 2

1.     A bond manager expects interest rates to decline and has to choose between 2 bonds.  Both bonds are 10 years, but Bond has a 5% coupon and YTM (yield to maturity) while Bon…

1. A bond portfolio manager holds three bonds in her portfolio. Bond 1 has a mar

1. A bond portfolio manager holds three bonds in her portfolio. Bond 1 has a market value of $25,000,000 and a duration of 2, bond 2 has a market value of $13,300,000 and a durati…

1. A bond will sell at a premium when a. the coupon rate is higher than the YTM.

1. A bond will sell at a premium when a. the coupon rate is higher than the YTM. b. the coupon rate is lower than the YTM. c. the coupon rate is equal to the YTM. d. the coupon ra…

1. A bond with a $100 annual interest payment with five years to maturity (not e

1. A bond with a $100 annual interest payment with five years to maturity (not expected to default) would sell for a premium if interest rates were below 9% and would sell for a d…

1. A bond\'s coupon rate is equal to the monthly-after tax interest divided by w

1. A bond's coupon rate is equal to the monthly-after tax interest divided by which one of the following? A. call price B. current price C. face value D. clean price E. none of th…

1. A botanist has produced a new variety of hybrid wheat that is better able to

1. A botanist has produced a new variety of hybrid wheat that is better able to withstand drought than other varieties. The botanist knows that for the parent plants, the proporti…

1. A capital budgeting project is expected to have the following cash flows: Yea

1. A capital budgeting project is expected to have the following cash flows: Year    Cash Flows 0          -$1,000,000 1          $400,000 2          $400,000 3          $200,000 …

1. A capitalized cost of $24,000 has been set aside to pay for the annual mainte

1. A capitalized cost of $24,000 has been set aside to pay for the annual maintenance costs for the main unspan on Hofstra's campus. Given a 6.2% annual interest rate, what is the…

1. A certain stock has a beta of 1.3. If the risk-free rate of return is 3.2 per

1. A certain stock has a beta of 1.3. If the risk-free rate of return is 3.2 percent and the market risk premium is 7.5 percent, what is the expected return of the stock? What is …

1. A certificate of deposit (CD) for 2 years willhave the same yield as a CD or

1. A certificate of deposit (CD) for 2 years willhave the same yield as a CD or 1 year followed by an investment in another 1 year CD after 1 year. TRUE or FALSE 2. Recall that a …

1. A client of your bank wants to save $50,000 as a down payment on a house in s

1. A client of your bank wants to save $50,000 as a down payment on a house in six years. How much does she need to invest today in an account paying 7.25% annually? 2. You are of…

1. A clinic’s management has estimated the net present value (NPV) for a propose

1.       A clinic’s management has estimated the net present value (NPV) for a proposed project at $15,000. All else held constant, which of the following would increase the proje…

1. A common approach of estimating the variability of returns involving forecast

1. A common approach of estimating the variability of returns involving forecasting the pessimistic, most likely, and optimistic returns associated with the asset is called Select…

1. A common approach of estimating the variability of returns involving forecast

1. A common approach of estimating the variability of returns involving forecasting the pessimistic, most likely, and optimistic returns associated with the asset is called Select…

1. A company can usually increase sales without increasing which one of the foll

1. A company can usually increase sales without increasing which one of the following (accounts receivable, cost of sales, accounts payable, inventory, or fixed assets)? 2. A comp…

1. A company currently pays a dividend of $1.75 per share, D 0 = 1.75. It is est

1. A company currently pays a dividend of $1.75 per share, D0 = 1.75. It is estimated that the company's dividend will grow at a rate of 15% percent per year for the next 2 years,…

1. A company currently pays a dividend of $4 per share (D0 = $4). It is estimate

1. A company currently pays a dividend of $4 per share (D0 = $4). It is estimated that the company's dividend will grow at a rate of 19% per year for the next 2 years, then at a c…

1. A company currently pays a dividend of $4 per share (D0 = $4). It is estimate

1. A company currently pays a dividend of $4 per share (D0 = $4). It is estimated that the company's dividend will grow at a rate of 19% per year for the next 2 years, then at a c…

1. A company has Net Income of $20, which included $4 of depreciation expense. T

1. A company has Net Income of $20, which included $4 of depreciation expense. There were no other noncash expenses in Net Income and there were no gains or losses. Accounts recei…

1. A company has a $37 million stock portfolio with a beta of 1.2. The S&P index

1. A company has a $37 million stock portfolio with a beta of 1.2. The S&P index futures price is currently standing at 1000. Futures contracts on $250 times the index can be …

1. A company has annual sales of $160 million, a net profit margin of 4%, and to

1. A company has annual sales of $160 million, a net profit margin of 4%, and total assets of $90 million. It carries $10 million in accounts receivable, $25 million in inventory,…