Financial literacy

1. You hope to retire in 30 years, when you do, you would like to have the purch

1. You hope to retire in 30 years, when you do, you would like to have the purchasing power of $100,000 today, during each year of retirement. Your cash is needed at the beginning…

1. You intend to buy a bond issued by ABC Inc. The bond has 15 years remaining t

1. You intend to buy a bond issued by ABC Inc. The bond has 15 years remaining to maturity, $1,000 par value and is paying 8% annual coupon. (a) How much will you pay for the bond…

1. You invest $100,000 at 10% for 1 years. How much will you have? and how much

1. You invest $100,000 at 10% for 1 years. How much will you have? and how much interest will you earn? 2. You want $300,000 in 10 years. If you can earn 10%, how much do you have…

1. You invest $3,000 a yearfor three years at 12 percent. a. What is the value o

1.       You invest $3,000 a yearfor three years at 12 percent. a.       What is the value of yourinvestment after one year? Multiply $3,000 X 1.12 b.      What is the value of yo…

1. You just paid $348,000 for a policy that will pay you and your heirs $12,000

1. You just paid $348,000 for a policy that will pay you and your heirs $12,000 a year forever. What rate of return are you earning on this policy? 2. Marko, Inc. is considering t…

1. You just started at a new position at a large investment bank. You have been

1. You just started at a new position at a large investment bank. You have been assigned to help a senior analyst, Ms. Jones, on a Dutch Auction of shares for Thornton &Danahe…

1. You just won a prize and will receive $1,000 today plus $1,000 one year from

1. You just won a prize and will receive $1,000 today plus $1,000 one year from now. What is this prize worth to you today if you can earn 6.5 percent annually on your investments…

1. You made the following direct investment through a stock company (such as McD

1. You made the following direct investment through a stock company (such as McDonald's). You were happy to avoid any brokerage fee. Calculate your total percentage return using t…

1. You manage a loan portfolio at a local bank. One day you are approached by a

1. You manage a loan portfolio at a local bank. One day you are approached by a Jim Riskind, who is seeking an unsecured loan of $10,000 for a period of 1 year. Upon checking his …

1. You manage a loan portfolio at a local bank. One day you are approached by a

1. You manage a loan portfolio at a local bank. One day you are approached by a Jim Riskind, who is seeking an unsecured loan of $10,000 for a period of 1 year. Upon checking his …

1. You must find the payback for a project, and you have misplaced some of the i

1. You must find the payback for a project, and you have misplaced some of the information that you were given. You know that the project will generate positive cash flows of $60,…

1. You need $3,000 to buy a new stereo for your car. If you have $1,100 to inves

1. You need $3,000 to buy a new stereo for your car. If you have $1,100 to invest at 7% compounded annually, how long will you have to wait to buy the stereo? 12.39 years 13.05 ye…

1. You observe that one U.S. dollar is currently equal to 24 Mexican pesos in th

1. You observe that one U.S. dollar is currently equal to 24 Mexican pesos in the spot market.  The one year US interest rate is 4% and the one year Mexican interest rate is 8%. O…

1. You observe that one U.S. dollar is currently equal to 3.6 Brazilian reals in

1. You observe that one U.S. dollar is currently equal to 3.6 Brazilian reals in the spot market.  The one year US interest rate is 7% and the one year Brazilian interest rate is …

1. You own a stock portfolio invested 15 percent in Stock Q, 20 percent in Stock

1. You own a stock portfolio invested 15 percent in Stock Q, 20 percent in Stock R, 35 percent in Stock S, and 30 percent in Stock T. The betas for these four stocks are 1.1, 0.8,…

1. You own an undeveloped piece of property upon which you can build an office c

1.  You own an undeveloped piece of property upon which you can build an office complex. Twenty years ago you paid $40,000 for the land. Similar properties are now selling for $20…

1. You paid $1171 for a corporate bond that has a 10.81 percent coupon rate. Wha

1. You paid $1171 for a corporate bond that has a 10.81 percent coupon rate. What is the bond's current yield? Round the answer to two decimal places in percentage form. 2. What i…

1. You paid $1171 for a corporate bond that has a 10.81 percent coupon rate. Wha

1. You paid $1171 for a corporate bond that has a 10.81 percent coupon rate. What is the bond's current yield? Round the answer to two decimal places in percentage form. 2. Fresh …

1. You plan to go to Asia to visit friends in three years. The trip is expected

1. You plan to go to Asia to visit friends in three years. The trip is expected to cost a total of $10,000 at that time. Your parents have deposited $5,000 for you in a Certificat…

1. You purchase a bond with an invoice price of $1,043. The bond has a coupon ra

1. You purchase a bond with an invoice price of $1,043. The bond has a coupon rate of 6.8 percent, semiannual coupons, and there are five months to the next coupon date. a) What i…

1. You purchase a high-yield, junk bond for $1,000 that pays $140 annually. Afte

1. You purchase a high-yield, junk bond for $1,000 that pays $140 annually. After buying the bond, yields decline and you are able to reinvest the interest at only 9 percent. You …

1. You purchase a home for $100,000 with a 20 year mortgage at 12%. If you make

1. You purchase a home for $100,000 with a 20 year mortgage at 12%. If you make annual mortgage payments, what is your annual payment? PV = FV = PMT = n = i = How much interest di…

1. You purchase a small business that is valued at $164857. You decide to borrow

1. You purchase a small business that is valued at $164857. You decide to borrow $73579 at 5% interest and pay for the rest with equity. The debt is due in one year, and you expec…

1. You purchase one IBM July 120 call contract for a premium of $5. You hold the

1. You purchase one IBM July 120 call contract for a premium of $5. You hold the option until the expiration date when IBM stock is at $123 per share on the market. How much profi…

1. You purchase one IBM July 120 put contract for a premium of $5 (per share). Y

1. You purchase one IBM July 120 put contract for a premium of $5 (per share). You hold the option until the expiration date when IBM stock sells for $123 per share. You will real…

1. You purchased 1,000 shares of stock for $43 per share exactly one year ago. D

1. You purchased 1,000 shares of stock for $43 per share exactly one year ago. During the year, the stock paid a $.50 dividend per share and the current stock price is $27 per sha…

1. You purchased 1,000 shares of stock for $43 per share exactly one year ago. D

1. You purchased 1,000 shares of stock for $43 per share exactly one year ago. During the year, the stock paid a $.50 dividend per share and the current stock price is $27 per sha…

1. You purchased 1,000 shares of stock for $43 per share exactly one year ago. D

1. You purchased 1,000 shares of stock for $43 per share exactly one year ago. During the year, the stock paid a $.50 dividend per share and the current stock price is $27 per sha…

1. You purchased 100 shares of CSCO stock last year for $35.84. During the last

1. You purchased 100 shares of CSCO stock last year for $35.84. During the last 12 months, the company paid $1.28 in dividends and the stock price when up to $43.62. What is your …

1. You purchased 3 call option contracts with a strike price of $35 and a premiu

1.   You purchased 3 call option contracts with a strike price of $35 and a premium of $1.20. At expiration, the stock was selling for $37.20 a share. What is your total profit or…

1. You purchased eight TJH call option contracts with a strike price of $37.50 w

1.    You purchased eight TJH call option contracts with a strike price of $37.50 when the option quote was $.55. The option expires today when the value of TJH stock is $37.10. I…

1. You receive a gift of $2,000 at the birth of your daughter. You decide to inv

1. You receive a gift of $2,000 at the birth of your daughter. You decide to invest the money for her college education. If you can earn 8% on the money for the 18 years, how much…

1. You received $30,000 from your grandparents. You want to investment it to fun

1. You received $30,000 from your grandparents. You want to investment it to fund your mortgage down-payment in four years. You want to buy a house that is at least $200,000 but n…

1. You run a farm that consists of 100 acres of land. The yearly output depends

1. You run a farm that consists of 100 acres of land. The yearly output depends on the weather conditions (good, normal or bad). At the beginning of each year you decide how much …

1. You run a farm that consists of 100 acres of land. The yearly output depends

1. You run a farm that consists of 100 acres of land. The yearly output depends on the weather conditions (good, normal or bad). At the beginning of each year you decide how much …

1. You sell one IBM July 120 call contract for a premium of $3. At the expiratio

1. You sell one IBM July 120 call contract for a premium of $3. At the expiration date, iBM stock sells for $123 per share. You will realize a _______ on the investment (assume th…

1. You serve as an outside director for the Supplies, a multi-billion dollar ent

1. You serve as an outside director for the Supplies, a multi-billion dollar enterprise. You have been assigned to the Compensation Committee, which is being formed in response to…

1. You want to accumulate enough money over the next 10 years to pay for your so

1. You want to accumulate enough money over the next 10 years to pay for your son’s college. The total costs in 10 years are expected to be $200,000 that you want to pay in advanc…

1. You want to be a millionaire when you retire in 35 years. How much do you hav

1. You want to be a millionaire when you retire in 35 years.    How much do you have to save each month if you can earn an 11.5 percent annual return? (Do not round intermediate c…

1. You want to buy a new car for $30,000 and want to finance $20,000 of the purc

1. You want to buy a new car for $30,000 and want to finance $20,000 of the purchase price (you will put $10,000 down out of your own pocket). You want to get an idea of the diffe…

1. You want to quit your job and return to school for an MBA degree 5 years from

1. You want to quit your job and return to school for an MBA degree 5 years from now, and you plan to save $8,000 per year, beginning immediately. You will make 5 deposits in an a…

1. You write a put option on a stock for a premium of $1. The exercise price is

1. You write a put option on a stock for a premium of $1. The exercise price is $6.50. What is the option’s profit or loss if just prior to expiration the stock price is $6.00? a.…

1. You\'re trying to save to buy a new $207,000 Ferrari. You have $57,000 today

1. You're trying to save to buy a new $207,000 Ferrari. You have $57,000 today that can be invested at your bank. The bank pays 6.5 percent annual interest on its accounts. How lo…

1. You\'ve been saving up for a new car that you think costs $25,000. You alread

1. You've been saving up for a new car that you think costs $25,000. You already have $10,000 and you think that, with interest and additional savings, the $10,000 will grow to $2…

1. You\'ve been saving up for a new car that you think costs $25,000. You alread

1. You've been saving up for a new car that you think costs $25,000. You already have $10,000 and you think that, with interest and additional savings, the $10,000 will grow to $2…

1. You\'ve observed the following returns on Crash-n-Burn Computer\'s stock over

1. You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 6 percent, -14 percent, 12percent, 9 percent, and 11 percent. Suppose the avera…

1. Yount Company has provided information on intangible assets as follows. A pat

1. Yount Company has provided information on intangible assets as follows. A patent was purchased from Ford Company for $2,000,000 on January 1, 2014. Yount estimated the remainin…

1. Your US-based firm is about to sign a contract to buy a machine from a manufa

1. Your US-based firm is about to sign a contract to buy a machine from a manufacturer based in Singapore. The price of the machine is S$ 3,000,000 and the payment is to be made i…

1. Your boss asks you to evaluate the purchase of a new battery-operated toaster

1. Your boss asks you to evaluate the purchase of a new battery-operated toaster for his restaurant chain. The toaster [ BT ] costs $80 per unit, and has an estimated useful life …

1. Your cash flows are $195,000 this year, and you expect cash flow to keep pace

1. Your cash flows are $195,000 this year, and you expect cash flow to keep pace with any increase in the general level of prices. The interest rate currently is 5.1%, and you ant…