Answered: . Why are financial markets so keenly…

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. Why are financial markets so keenly regulated? Explain the rational for the regulation

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 9P

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Question

1. Why are financial markets so keenly regulated? Explain the rational for the regulation

2. A. Nii Laryea purchased a T-bill with a GHC10,000 par value for GHC9,465. One
hundred days later, Nii sells the t-bill for GHC9,650. Assuming 365 days in a year,
what is Nii Laryea’s expected annualized yield from the transaction?

3. Endicott Enterprises Inc. has twenty years remaining on Ghc 1,000 par value
semiannual coupon bonds paying a coupon of Ghc40. If the yield to maturity on these
bonds is 6% per year, what is the current price?

4. Can a borrower in Ghana face penalties if a loan is prepaid? Discuss two reasons why
a borrower would decide to bear this cost.

5.Give an account of the impact of the Coronavirus (COVID 19) on the financial markets
with illustrations from two (2) global financial centres known to you.

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A. Nii Laryea purchased a T-bill with a GHC10,000 par value for GHC9,465. One hundred days later, Nii sells the t-bill for GHC9,650. Assuming 365 days in a year, what is Nii Laryea’s expected annualized yield from the transaction? B. Assume investors require a 5% annualized return on a six-month t-bill with a par value of GHC10,000. The price investors would be willing to pay in cedis will be?
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