Financial literacy

1. For all questions in this section. Option quotations on a stock are shown bel

1. For all questions in this section. Option quotations on a stock are shown below. The current stock price, S, is $104 per share. The August 90 CALL option is: 2. Calculate the i…

1. For each 1% change in the market portfolio\'s excess return, the investment\'

1. For each 1% change in the market portfolio's excess return, the investment's excess return is expected to change by ________ percent due to risks that it has in common with the…

1. For each price combination below, compute the price ratio and find the corres

1. For each price combination below, compute the price ratio and find the corresponding least-cost ration. Price Least-Cost Ratio Ration No. a) Corn at 4.0¢ per lb., SBOM at 12¢ p…

1. For how many years a retirement fund will last if one follows 4% approach to

1. For how many years a retirement fund will last if one follows 4% approach to retirement distribution at the beginning of every year? Assume expected return and inflation to be …

1. For taxation purposes, property is usually assessed at a fractional part of i

1. For taxation purposes, property is usually assessed at a fractional part of its sale (market) value. Revenues are determined by applying tax rates against these assessed values…

1. For the last 15 years, Katarina has put $1,000 per month into an investment a

1. For the last 15 years, Katarina has put $1,000 per month into an investment account at 4.75% per year compounded monthly. What is the present value of her account? Katarina has…

1. For the month of January, a checking account had a balance of $658 for 21 day

1. For the month of January, a checking account had a balance of $658 for 21 days, $1,832 for 6 days, and $517 for 4 days. Calculate this account’s mean daily balance for January.…

1. For this problem, use the following randomly generated list of accounts, plac

1. For this problem, use the following randomly generated list of accounts, placing them in appropriate order to prepare an income statement. Accounts ($000,000) Depreciation 25 G…

1. For this question, assume taxes, depreciation and amortization are always equ

1. For this question, assume taxes, depreciation and amortization are always equal to zero. Consider an allequity firm with market capitalization equal to $10,000, earnings equal …

1. For which of the following actions can a certificant be subject to disciplina

1. For which of the following actions can a certificant be subject to disciplinary action? (1) A certificant commingles his/her funds with a clients’ (2) A certificant traveling i…

1. Forrester Fashions has annual credit sales of 250,000 units with an average c

1.       Forrester Fashions has annual credit sales of 250,000 units with an average collection period of 70 days. The company has a per-unit variable cost of $20 and a per unit s…

1. Four fundamental factors affect the cost of money: (1) the return that borrow

1. Four fundamental factors affect the cost of money: (1) the return that borrowers expect to earn on their investments, (2) the preference of savers to spend their income in the …

1. Fourteen years ago, your parents set aside $37,500 to help fund your college

1. Fourteen years ago, your parents set aside $37,500 to help fund your college education. Today, that fund is valued at $71,332. What rate of interest is being earned on this acc…

1. Foxtrot Corporation wants to setup a factory producing tires. The factory wou

1. Foxtrot Corporation wants to setup a factory producing tires. The factory would be constructed in two years post which it will start production. Foxtrot takes a loan to part-fu…

1. Frank Hurley is a farmer in Ames, Iowa. He has 300 acres on which he wishes t

1.         Frank Hurley is a farmer in Ames, Iowa. He has 300 acres on which he wishes to plant wheat and corn for the season. For crop rotation purposes he must plant at least 10…

1. Frank Inc. has the following abridged balance sheet : Current assets $3600, F

1. Frank Inc. has the following abridged balance sheet : Current assets $3600, Fixed assets : $6400, Total Assets: $10,000 Debt: $5200 Preferred stock :600 Common Equity: $4200 To…

1. Frank purchased a $320,000 life insurance policy on his own life. A year late

1. Frank purchased a $320,000 life insurance policy on his own life. A year later, when it had a value for gift purposes of $25,000, he assigned the policy to his son, Sam. A few …

1. Franklin Corporation has a current stock price of $23 per share and paid a di

1. Franklin Corporation has a current stock price of $23 per share and paid a dividend last year of $2.00; and, it expects that dividends, earnings and stock price to grow at the …

1. Frederickson Office Supplies recently reported $12,500 of sales, $7,250 of op

1. Frederickson Office Supplies recently reported $12,500 of sales, $7,250 of operating costs other than depreciation, and $1,250 of depreciation. The company had no amortization …

1. Free Motion Enterprises intends to pay a $2.20 per share annual dividend in t

1. Free Motion Enterprises intends to pay a $2.20 per share annual dividend in the coming week. Dividends are expected to increase by 3.75 percent annually. What is one share of t…

1. From a value-creation perspective, is it more important for a company to know

1. From a value-creation perspective, is it more important for a company to know where to compete or how to compete? That is, is it more important to play in the right markets or …

1. From a value-creation perspective, is it more important for a company to know

1. From a value-creation perspective, is it more important for a company to know where to compete or how to compete? That is, is it more important to play in the right markets or …

1. Full House Co. has the following information: -Beta=1.2, Market Risk Premium=

1. Full House Co. has the following information: -Beta=1.2, Market Risk Premium= 7%, Risk free rate = 3% -A current price of common stock of $60/share, with 100,000 shares outstan…

1. Future value If you deposit $11,000 in a bank account that pays 11% interest

1. Future value If you deposit $11,000 in a bank account that pays 11% interest annually, how much would be in your account after 5 years? Round your answer to the nearest cent. $…

1. Future value: You are interested in investing $10,000, a gift from your grand

1. Future value: You are interested in investing $10,000, a gift from your grandparents, for the next four years in a mutual fund that will earn an annual return of 8 percent. Wha…

1. Futures Contracts Describe the general charac- teristics of a futures contrac

1.            Futures Contracts Describe the general charac- teristics of a futures contract. How does a clearinghouse facilitate the trading of financial futures contracts? 2.   …

1. Fuzzy Button Clothing Company is considering a one-year project that requires

1. Fuzzy Button Clothing Company is considering a one-year project that requires an initial investment of $600,000; however, in raising this capital, Fuzzy Button will incur an ad…

1. GDP is calculated by summing ________. consumption, investment, and exports o

1. GDP is calculated by summing ________. consumption, investment, and exports of all final goods and services produced within the borders of a given country during a specific per…

1. GDP is calculated by summing ________. consumption, investment, and exports o

1. GDP is calculated by summing ________. consumption, investment, and exports of all final goods and services produced within the borders of a given country during a specific per…

1. General Cereal common stock dividends have been growing atan annual rate of 7

1. General Cereal common stock dividends have been growing atan annual rate of 7 percent peryear over the past 10 years. Current dividend(D0) is $1.70per share. What is thecurrent…

1. General Construction Incorporated (GCI) hires A-1 Contractors Incorporated to

1. General Construction Incorporated (GCI) hires A-1 Contractors Incorporated to work at a construction site as an independent contractor. Whether GCI will be held liable for tort…

1. George Costanza has just taken out an $23,604.00, 60-month car loan from his

1. George Costanza has just taken out an $23,604.00, 60-month car loan from his local bank with a 6.12% interest rate compounded monthly. At the end of the second year, George pla…

1. Giggle Inc reports the following abbreviated balance sheet: Cash = $ 8000 Oth

1. Giggle Inc reports the following abbreviated balance sheet: Cash = $8000 Other Asset = $20000 Debt = $0 Equity = $28000 Number of shares outstanding = 3000 Giggle just paid a c…

1. Given a 3-month put price is 4.5 at strike price of 57.5 on an asset that is

1. Given a 3-month put price is 4.5 at strike price of 57.5 on an asset that is currently trading at 55.17. Assume risk free rate to be 7%. What is the price of a call option with…

1. Given a 6 percent interest rate, compute the present value of payments made i

1. Given a 6 percent interest rate, compute the present value of payments made in years 1, 2, 3, and 4 of $1,150, $1,350, $1,350, and $1,650. (Do not round intermediate calculatio…

1. Given that investors can diversify, which of the Stock A has a capital gains

1. Given that investors can diversify, which of the Stock A has a capital gains yield of 8% and Stock B has a capital gains yield of 13%. 4, following risks is irrelevant? (In oth…

1. Given the financial information for the A.E Neuman Corporation answer the fol

1. Given the financial information for the A.E Neuman Corporation answer the following question: a) What is the dividend payout ratio for 2007? b) Prepare a statement of cash flow…

1. Given the folllowing information, calculate the weight average cost of capita

1. Given the folllowing information, calculate the weight average cost of capital for happy corp. debt 35% preffered stock 20 common equity 45 bond cupon rate 11% bond yield to ma…

1. Given the following annual net cash flows, determine the internal rate of ret

1. Given the following annual net cash flows, determine the internal rate of return to the nearest whole percent of a project with an initial outlay of $750,000. YEAR NET CASH FLO…

1. Given the following annual net cash flows, determine the internal rate of ret

1. Given the following annual net cash flows, determine the internal rate of return to the nearest whole percent of a project with an initial outlay of $750,000. YEAR NET CASH FLO…

1. Given the following financial data, compute the return on assets and return o

1. Given the following financial data, compute the return on assets and return on equity: net income/sales = 8%, sales/total assets = 2.5X, and debt/total assets = 15%. 2. What wo…

1. Given the following information Burnaby Mountain Trading Company Income State

1. Given the following information Burnaby Mountain Trading Company Income Statement (2008) Sales Cost of goods sold Gross Profit Selling and administrative expenses Operating pro…

1. Given the following information on Big Brothers, Inc. capital structure, comp

1. Given the following information on Big Brothers, Inc. capital structure, compute the company’s weighted average cost of capital (WACC). The company’s marginal tax rate is 40%. …

1. Given the following information on the revenue and expense of First National

1. Given the following information on the revenue and expense of First National Bank, determine the bank's net income after taxes for the year just concluded: Salaries of employee…

1. Given the following information on the revenues and expenses of First Nationa

1. Given the following information on the revenues and expenses of First National Bank, determine the bank’s net income after taxes for the year just concluded: Salaries and emplo…

1. Given the following information, calculate the effective gross income multipl

1. Given the following information, calculate the effective gross income multiplier for the specific investment. Effective gross income = $60,000, First-year NOI = $20,000, Acquis…

1. Given the following information, calculate the weighted average cost of capit

1. Given the following information, calculate the weighted average cost of capital for Digital Processing Inc. Line up the calculations in the order shown in Table 11-1. Percent o…

1. Given the following probability distribution and stock return information: Ec

1. Given the following probability distribution and stock return information: Economy State Probability (p) Stock A Return Stock B Return Good 0.3 15% 10% Normal 0.6 5% 8% Bad 0.1…

1. Given the information below calculate Blue Cloud Computing’s Free Cash Flow (

1. Given the information below calculate Blue Cloud Computing’s Free Cash Flow (10 Points) FCF = ((EBIT * (1-Tax Rate) + (Depreciation and Amortization)) - (Capital Expenditures +…

1. Given the returns and probabilities for the three possible states listed here

1. Given the returns and probabilities for the three possible states listed here, calculate the covariance between the returns of Stock A and Stock B. For convenience, assume that…