Financial literacy
81314 questions • Page 73 / 1627
1. Suppose a hedge fund earns 1% per month every month. a. What is the EAR on an
1. Suppose a hedge fund earns 1% per month every month. a. What is the EAR on an investment in this fund? b. If you need $1 million dollars in 5 years, how much do you have to inv…
1. Suppose a mid-sized regional bank has $1 million dollars which it is consider
1. Suppose a mid-sized regional bank has $1 million dollars which it is considering investing either in 30 year zero coupon treasury bond or in a jumbo 30 year fixed rate resident…
1. Suppose a stock had an initial price of $90 per share, paid a dividend of $2.
1. Suppose a stock had an initial price of $90 per share, paid a dividend of $2.40 per share during the year, and had an ending share price of $98. Compute the percentage total re…
1. Suppose after you graduate, you plan to be a stock analyst for a big financia
1. Suppose after you graduate, you plan to be a stock analyst for a big financial institution. You know that if the stock market increases in value, your will get a good job with …
1. Suppose it is now January 1, 2015, and you just sold an investment that you o
1. Suppose it is now January 1, 2015, and you just sold an investment that you own for $12,500. You purchased the investment four years ago for $10,500. During the time you held t…
1. Suppose someone offered you your choice of two equally risky annuities, each
1. Suppose someone offered you your choice of two equally risky annuities, each paying $5,000 per year for 5 years. One is an annuity due, while the other is a regular (or deferre…
1. Suppose that 5 years from now you will receive $10,000 at the end of every ye
1. Suppose that 5 years from now you will receive $10,000 at the end of every year for 5 years. What is the present value of this annuity if the opportunity cost rate is 5%? 2. Wh…
1. Suppose that American Eagle will have an operating income before taxes of $20
1. Suppose that American Eagle will have an operating income before taxes of $200 million (state 1) or $ -100 million (state 2) with equal probability (each state has a probabilit…
1. Suppose that JB Cos. has a capital structure of 75 percent equity, 25 percent
1. Suppose that JB Cos. has a capital structure of 75 percent equity, 25 percent debt, and that its before-tax cost of debt is 13 percent while its cost of equity is 17 percent. A…
1. Suppose that a company\'s days sales outstanding (DSO) increased from 85 days
1. Suppose that a company's days sales outstanding (DSO) increased from 85 days to 95 days. Which of the following will occur, all else being equal? a. The company will appear to …
1. Suppose that an investor owns a pass-through in which the remaining mortgage
1. Suppose that an investor owns a pass-through in which the remaining mortgage balances at the beginning of some month is $100 million. Assuming that the SMM is 0.69244% and the …
1. Suppose that the current one-year rate (one-year spot rate) and expected one-
1. Suppose that the current one-year rate (one-year spot rate) and expected one-year T-bill rates over the following three years (i.e., years 2, 3, and 4, respectively) are as fol…
1. Suppose that the current price of eBay is $40 per share. Suppose further that
1. Suppose that the current price of eBay is $40 per share. Suppose further that the share price of eBay one month from now depends on the state of the economy as follows: Also no…
1. Suppose that the financial ratios of a potential borrowing firm took the foll
1. Suppose that the financial ratios of a potential borrowing firm took the following values x, = 0.30 X30.30 Xs=0.15 X5 2.1 Altman's discriminant function takes the form Z-1.2X1+…
1. Suppose that the yield curve is flat at 5% per annum with continuous compound
1. Suppose that the yield curve is flat at 5% per annum with continuous compounding. A swap with a notional principal of $100 million in which 6% is received and six-month LIBOR i…
1. Suppose that you are planning a project that will cost $60 to fund, and will
1. Suppose that you are planning a project that will cost $60 to fund, and will generate cash flows for each of the next three years as described below: Probability of CF CF .4 20…
1. Suppose that you have one domestic production facility that supplies both the
1. Suppose that you have one domestic production facility that supplies both the domestic and foreign markets. Assume that the demand for your product in the domestic market i…
1. Suppose that you want to only work until you are 55, retire, live at the lake
1. Suppose that you want to only work until you are 55, retire, live at the lake, fish, hunt and watch grass grow. At age 55, you have accumulated $350,000 in your retirement acco…
1. Suppose that your company is expected to pay a dividend of $1.70/share next y
1. Suppose that your company is expected to pay a dividend of $1.70/share next year. There has been a steady growth in dividends of 5.1%/year and the market expects that to contin…
1. Suppose the New York stock exchange were to impose a fee of $.0025 per share
1. Suppose the New York stock exchange were to impose a fee of $.0025 per share in addition to all existing fees and costs on all transactions carried out on the exchange. a. What…
1. Suppose the September CBOT Treasury bond futures contract has a quoted price
1. Suppose the September CBOT Treasury bond futures contract has a quoted price of 89-09. What is the implied annual interest rate inherent in this futures contract? 2. Suppose th…
1. Suppose the Swiss franc revalues from $0.40 at the beginning of the year to $
1. Suppose the Swiss franc revalues from $0.40 at the beginning of the year to $0.44 at the end of the year. U.S.inflation is 5% and Swiss inflation is 3% during the year. What i…
1. Suppose the current spot price for gold is $700 per ounce. The risk-free inte
1. Suppose the current spot price for gold is $700 per ounce. The risk-free interest rate available to all investors for borrowing or lending is 6% per month (monthly compoundi…
1. Suppose the nominal interest rate is 8.50% compounded quarterly. The effectiv
1. Suppose the nominal interest rate is 8.50% compounded quarterly. The effective interest rate would be a) 2.1250% b)34.000% c) 8.77% d) 8.50% 2. The current market interest rate…
1. Suppose the real rate is 3.0 percent and the inflation rate is 4.6 percent. W
1. Suppose the real rate is 3.0 percent and the inflation rate is 4.6 percent. What rate would you expect to see on a Treasury bill? 2. Backwater Corp. has 8 percent coupon bonds …
1. Suppose there are only two types of private sector investments in Hing Hang I
1. Suppose there are only two types of private sector investments in Hing Hang Island's economy. Tourism investment and residential investment. The government imposed a 10% invest…
1. Suppose you are a fund manager and worrying about risk arising from the uncer
1. Suppose you are a fund manager and worrying about risk arising from the uncertain performance of the market as a whole. In order to reduce risk, which position of index futures…
1. Suppose you are looking at the common stock of Apple Inc. You expect the next
1. Suppose you are looking at the common stock of Apple Inc. You expect the next year dividend payment will be $3.50 per share and the stock price after the dividend payment will …
1. Suppose you bought a 6 percent coupon bond one year ago for $890. The bond se
1. Suppose you bought a 6 percent coupon bond one year ago for $890. The bond sells for $915 today. (a) Assuming a $1,000 face value, what was your total dollar return on thi…
1. Suppose you buy a bond with a 12 percent annual coupon, payable semiannually.
1. Suppose you buy a bond with a 12 percent annual coupon, payable semiannually. You actually pay $ 1,080 for this bond. On the day you buy it, the next coupon is due in 3 months.…
1. Suppose you buy an asset for $1,000,000. If it costs $100,000 for shipping an
1. Suppose you buy an asset for $1,000,000. If it costs $100,000 for shipping and installation, how much is your investment outlay? 2. Suppose you buy an asset for $100,000 that i…
1. Suppose you expect the Croatian currency, the Kuna, to appreciate 5% relative
1. Suppose you expect the Croatian currency, the Kuna, to appreciate 5% relative to the USD over the next 6 months. What additional information would you need in order to decide w…
1. Suppose you have $2,000 and plan to purchase a 10-year certificate of deposit
1. Suppose you have $2,000 and plan to purchase a 10-year certificate of deposit (CD) that pays 12.0% interest, compounded annually. How much will you have when the CD matures? $6…
1. Suppose you have the choice of investing in (A) a zero-coupon bond, which cos
1. Suppose you have the choice of investing in (A) a zero-coupon bond, which costs $500 today, pays no coupon during its life, compounds semi-annually, and then pays $1,000 after …
1. Suppose you hold LLL employee stock options representing options to buy 10,40
1. Suppose you hold LLL employee stock options representing options to buy 10,400 shares of LLL stock. You wish to hedge your position by buying put options with three-month expir…
1. Suppose you invested $75 in the Ishares Dividend Stock Fund (DVY) a month ago
1. Suppose you invested $75 in the Ishares Dividend Stock Fund (DVY) a month ago. It paid a dividend of $0.50 today and and then you sold it for $70. What was your return on inves…
1. Suppose you notice that the April gold futures price is $1,518, while that fo
1. Suppose you notice that the April gold futures price is $1,518, while that for December is $1,535 (both prices are per ounce). Historically, this spread has been around $10. Su…
1. Suppose you operate a large gold distributor that sells gold to jewelry manuf
1. Suppose you operate a large gold distributor that sells gold to jewelry manufacturers nationwide. You have entered into a large sales contract to deliver $4,200 ounces of gold …
1. Suppose you want to buy some new furniture for your family room. You currentl
1. Suppose you want to buy some new furniture for your family room. You currently have $500 and the furniture you want costs $589. If you can earn 5%, how many years will you have…
1. Suppose youdiscover a treasure check of $10 billion in cash. a. Is this a rea
1. Suppose youdiscover a treasure check of $10 billion in cash. a. Is this a real or financial asset? b. Is society any richer for the discovery? c. Are you wealthier? …
1. Suppose your company needs to raise $28 million and you want to issue 20-year
1. Suppose your company needs to raise $28 million and you want to issue 20-year bonds for this purpose. Assume the required return on your bond issue will be 8 percent, and you'r…
1. Suppose your firm is considering investing in a project with the cash flows s
1. Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 7 percent, and that …
1. Suppose your firm is considering investing in a project with the cash flows s
1. Suppose your firm is considering investing in a project with the cash flows shown as follows, that the required rate of return on projects of this risk class is 8 percent,…
1. Suppose your firm is considering investing in a project with the cash flows s
1. Suppose your firm is considering investing in a project with the cash flows shown as follows, that the required rate of return on projects of this risk class is 10 percent…
1. Suppose your firm is considering investing in a project with the cash flows s
1. Suppose your firm is considering investing in a project with the cash flows shown as follows, that the required rate of return on projects of this risk class is 10 percent…
1. Suppose your firm is considering two independent projects with the cash flows
1. Suppose your firm is considering two independent projects with the cash flows shown as follows. The required rate of return on projects of both of their risk class is 12 pe…
1. Suppose your firm is considering two mutually exclusive, required projects wi
1. Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown as follows. The required rate of return on projects of both of their r…
1. Suppose your firm is considering two mutually exclusive, required projects wi
1. Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown as follows. The required rate of return on projects of both of their r…
1. Suppose your firm is considering two mutually exclusive, required projects wi
1. Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown as follows. The required rate of return on projects of both of their r…
1. Suppose your firm is considering two mutually exclusive, required projects wi
1. Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown as follows. The required rate of return on projects of both of their r…
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