the roles of time and conditions of uncertainty are the two distinguishing characteristics of financial decisions.
in order to protect against a drop in price of the stocks you hold, you decide to lock in stock prices by signing a contract with financial intermediaries. what is the type of financial decision you make in the example? ( )
suppose that alice bought a house by obtaining a loan from a financial company, which raised funds by issuing stocks and bonds in the markets. which one is correct about the flow of funds? ( )
stock is one of the financial instruments traded on the money market.
suppose you put $1,000 into an account earning an interest rate of 5% per year for 5 years, and assuming you take nothing out of the account before then. what is the future value? what are the simple interest and the compound interest?
you take out a loan at an apr (annual percentage rate) of 12% with monthly compounding. what is the effective annual rate on your loan?
georgette is currently 30 years old, plans to retire at age 65 and to live to age 85. her labor income is $25,000 per year, and she intends to maintain a constant level of real consumption spending over the next 55 years. assume no taxes, no growth in real salary, and a real interest rate of 3% per year. what is the value of georgette’s human capital? and what is her permanent income?
you are taking out a $100,000 mortgage loan to be repaid over 25 years in 300 monthly payments. (a) if the interest rate is 16% per year what is the amount of the monthly payment? (b) if you can only afford to pay $1000 per month, how large a loan could you take? (c) if you can afford to pay $1500 per month and need to borrow $100,000, how many months would it take to pay off the mortgage? (d) if you can pay $1500 per month, need to borrow $100,000, and want a 25 year mortgage, what is the highest interest rate you can pay?
suppose you are a manager in the personal computer ision of compusell corporation, a large firm that manufactures many different types of computers. you come up with an idea for a new type of personal computer, which you call the pc1000. your estimates assume that sales will be 4,000 units per year at a price of $5,000 per unit. the total fixed costs are $3,500,000 per year, in which the depreciation is $400,000. the variable costs are $4,000 per unit for the pc1000. the corporate income tax rate is 40% per year. the initial outlay for pc1000 is $5,000,000 and an additional $2,200,000 you will get back at the end of the project’s life in year 7. the rate used to discount the cash flows is 15%. what would be the npv of the pc1000 project?
suppose you are a manager in the personal computer ision of compusell corporation, a large firm that manufactures many different types of computers. you come up with an idea for a new type of personal computer, which you call the pc1000. the initial outlay for pc1000 is $5,000,000. the total fixed costs are $3,500,000 per year, in which the depreciation is $400,000. the variable costs are $3,750 per unit for the pc1000. your estimates assume that the price of the personal computer is $5,000 per unit. the corporate income tax rate is 40% per year. and an additional $2,200,000 you will get back at the end of the project’s life in year 7.what would be the break-even volume for the pc1000 project if the cost of capital is 25% per year?
the book value of an asset as reported on a balance sheet often differs from the asset’s market value, and for financial decision-making purposes, the correct value to use is the book value whenever available. true or false?
when someone asserts he can make profit by yzing public information of stocks, he is a supporter of the semi-strong form of emh. true or false?
what are the current yield and yield to maturity on a three-year bond with a face value of $1,000 and a coupon rate of 6% per year and a price of $900?
xyz stock is expected to pay a idend of $2 per share a year from now, and its idends are expected to grow by 6% per year thereafter. if its price is now $20 per share, what must be the market capitalization rate?
which one of the following is an example of systematic risk?
（ ）is a standardized forward contract that is traded on some organized exchange.
which of the following statements about swap is not correct?
setting an interest-rate floor to is ogous to buy a ( ) option for a depositor.
which of the followings is not the way to avoid losses through insuring?
the risk-free rate is 5%, risk premium on the market portfolio is 10%, and the beta of betaful’s stock is 1.2. according to capm, the equilibrium expected rate of return on its stock should be ( ).
suppose the spot price of stock s&p is $100 and the one-year forward price is $107, then the implied risk-free rate is 7%.