Final fin 301_2

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Texas Southern University *

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Finance

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Apr 3, 2024

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docx

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FIN 301_2 / Dr. Fernandez FINAL TEST FINAL TEST FIN 301-2 Use your calculator, Excel, and formula to answer all the questions. Make sure you show your work, as I will need to see it to give you credit. 1. Fill in the following tables. a. Future Values = FV = PV × (1+r) n Present Value Future Value Number of Periods Interest Rate $55,000.00 $250,000.00 50 $37,500.00 $55,000.00 25 b. Present Values = FV × [1/(1+r) n ] Present Value Future Value Interest Rate Number of Periods $25,000.00 $235,609.76 0.08 $37,000.00 $350,000.00 0.13 c. Interest rate or discount rate. Fill in the interest rate for the following table Using the interest rate formula, r = (FV/PV) 1/n – 1 Present Value Future Value Number of Periods Interest Rate $55,000.00 $250,000.00 50 $37,500.00 $55,000.00 25 d. Waiting period. Fill in the number of periods for the following table. Using the waiting period formula, n = ln(FV/PV) / ln(1+r). Present Value Future Value Interest Rate Number of Periods $25,000.00 $235,609.76 0.08 $37,000.00 $350,000.00 0.13
FIN 301_2 / Dr. Fernandez FINAL TEST 2. Bill wants to borrow $37,000 for a car. He wants to pay in a period of 4 years. The lender offers a 9% interest rate. Estimate the yearly payment and prepare a loan amortization schedule for the amortized loan. Show your work. Year Beg. Bal. Payment Interest Prin. Red. End Bal. 1 2 3 4
FIN 301_2 / Dr. Fernandez FINAL TEST 3. Using the data below, calculate Stock XYZs expected return, E(r), and standard deviation σ (r) . Show your work. State of the Economy Probability of Economic State Return in Economic State Recession 30% 27% Steady 25% 15% Boom 45% –30% E(r) = ∑Probability of Economic State × Return in Economic State σ2 (r)= ∑[Return in State i E(r) ]2 × Probability of State i σ (r) = √ σ a. Show the range of results with a 95% probability in the table below
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