Ch 3 Practice Q's-Answers

Mr. Smith has some money to invest. He selected three stocks and two bond funds as possible investments, shown in the following table. Investment Stock A Stock B Stock C Bond-long term Bond-short term Risk Annual Return High Medium Low 15% 12% 9% 11% 8% One of Mr. Smith's investment requirements is "the total amount invested cannot exceed $500,000". Which option represents this constraint? Note: (X₁, X₂, X₁, X₁, and X, are investment in stock A, stock B, stock C, long term bond and short term bond, respectively

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• A college student borrowed P20,000 from a bank for his tuition fee and promised to pay the amount for one year. He received only the amount of P19200 after the bank collected the advance interest of P800. What was the rate of discount? What was the rate of interest?

11) Devin purchased a $3500 bond paying 4.5% annual simple interest after graduating from college. It is now 35 years later and he decides to cash in the bond. What is the value of this bond now? Round your answer to the nearest dollar. A) $16,336 B) $3537 C) $9013 D) $5513 E) $8632

2 ABC university tuition fees can be paid by on-time payment (pay total amount due when classes start at the cost of 90,000 pesos per year) or early-bird payment (pay total amount due 1 year in advance with a 10% discount. What is the amount of the savings compared to the on-time payment at the time that the on-time payment is made?

INSTRUCTION: SHOW YOUR COMPLETE SOLUTION AND HIGHLIGHT YOUR FINAL ANSWER. 1. Nikki deposited an amount of P150,000 for 31 days that earns P845.53 on maturity date after deducting the 20% withholding tax on interest income. Find the rate of interest per annum.

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A company has an investment project that would cost $10 million today and yield a payoff of $15 million in 4 years (a)  Should the firm undertake the project if the interest rate is 11 percent? 10 percent? 9 percent? 8 percent? (b)  Can you figure out the exact cutoff for the interest rate between profitability and nonprofitability?

True or False 1. A deferred annuity until ? period of ? interest, and A equal payments, can be compensated by paying A times [?/?, ?%, ? + 1] on the ? +1 period. 2. A zero profit implies that this is a breakeven point, and the amount of demand equals the amount of supply.

You pawned your PSP at Pawnshop for P5,000 and agreed to pay theamount at the end of 9 months. The pawnshop gave you P4,000 cash after deductingthe interest in advance. What was the rate of discount?

A bank charges one borrower (A) 8 percent interest per year and another borrower (B) 10 percent interest per year. Which of the following is a plausible reason for the higher interest rate for B? B has a better credit rating than A A is borrowing a larger amount than B. B is using the money for a less risky project than A A is borrowing the money for a longer period than B

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Terminal Activity PROBLEM SET Study and solve the given problems below. Show your complete solutions and label your answer. Write your ANSWER on your sheet. 1. Pamela makes a monthly salary of 27,900 pesos. She also receives an additional 9.5% commission rate bonus for any sales beyond 55,000 pesos. If Pamela sold 81,500 worth of merchandise this month, what is her total gross salary? 2. John is a realtor agent. He receives 5% commission when he sells a condo unit. How much commission will he receive for selling a condo unit that cost 3,500,000 pesos? 3. Randy was paid a commission of 8.5% on his total sales. If his sales were P13,000, P15,000, P25,000, P30,000, and 33, 000 pesos consecutively, find his gross earnings.

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Economics In 54 months time you expect a cash flow of $3 million. Calculate it’s present value (PV) given the 54-month interest rate is currently 4%, with a volatility of 120 basis points (bps). Explain, using equations with properly-defined mathematical notation, how to map this cash flow to vertices at 4 years and 5 years, in such a way that the volatility of the present value of the mapped cash flow remains at 120 bps. Suppose the 4-year rate has a volatility of 110 bps and the 5-year rate has a volatility of 150 bps, and their correlation is 0.9. How much should be mapped to each vertex. Give your answer in PV terms and round your answers to whole $ values.

Suppose mitigating greenhouse gas emissions today resulted in a benefit of 10 million dollars realized 100 years in the future. What is the present value of the 10 million dollars discounted at a standard 6% rate?

drop down box options are "lender" or "borrower"

The comparison between the current and ideal state and the difference between them corresponds which of the following stage of the consumer decision-making process: Postpurchase behavior Purchase behavior Information search O Evaluation of alternatives Problem recognition

Jane quit her job at IBM where she earned $50,000 a year. She cashed in $50,000 in corporate bonds that earned 10% interest annually to buy a mini-bus. Jane has decided to buy the mini-bus and set up a commuter service between Lincoln and Omaha. There are 1000 people who will pay $400 a year each for the commuter service; $280 from each person goes for gas, maintenance, insurance, depreciation, etc. What are Jane's total revenue? A. $600,000 B. $250,000 C. $400,000 D. $480

When does the discounted payback period occur?

A businessman needs P50,000 for his operations. One financial institution is willing to lend him the money for one year at 12.5% discount rate. Another lender is charging 14% with principal and interest payable at the end of one year. A third financier is willing to lend him P50,000 payable in 12 equal minthly installments of P4,600. Which offer is the best for him? Validate your answer.(kindly give the given, complete and detailed solution. Thank you)

please answer in text form and in proper format answer with must explanation , calculation for each part and steps clearly