a) Expectation of return from investment has two things, one is 'Liquidity preference' and 'Abnormal Return'. Which one do you prefer? Explain why. b) As a rational investor in which process would you like to utilize for your investment decision?
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a) Expectation of return from investment has two things, one is 'Liquidity preference' and 'Abnormal Return'. Which one do you prefer? Explain why.
b) As a rational investor in which process would you like to utilize for your investment decision?
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- Explain the assumption regarding consumers’ behavior in the life-cycle-permanent-income hypothesis which needs to be changed in order to explain the presence of precautionary, or buffer-stock saving.Which bonds are acceptable for investment? Justify your response with suitable computations. 2. What will be the total cost of investment in bonds? 3. Do the stock and bond investments fall within Stephanie’s investment guidelines? Show appropriate computations in support of your response.You believe that a corporation’s dividends will grow by 6% in the foreseeable future. If the company’s last dividend payment was $20, what should be the current price of the stock assuming that the market interest rate is 10%? If your computed price is lower than the actual market price, should you buy or sell the stock? Why?
- Stock Market Futures Market January KLSE composite index stands at 1162. Investor expects to purchase a RM10million stock portfolio in two months’ time Buys March KLSE CI contracts at 1158 March KLSE composite index has risen to 1171, making the acquisition costs of the shares more expensive. Sells March KLSE CI contracts at 1173 b. Assume that the investor wants to cover the full value of their expected investment. How many March KLSE CI futures contracts must they purchase? c. Calculate the profit/loss on the spot transaction. d. Calculate the profit/loss on the futures transaction. e. Is the hedging strategy efficient?Regarding the previous page, consider you and your partner are planning to become a franchise of an international food chain (L’Osteria, Subway, ...) and think about the following problems: • What impact do you think current economic conditions have on your investment plan • Explain the nature and the current status of risks involved in your plan.As an investment analyst working at ABC Corporation, drawing from your analysis of the US economic forecast, you've formulated a set of scenarios. Utilizing these scenarios, what is the expected return on this investment? Group of answer choices 9.00 percent 13.45 percent 11.91 percent 10.67 percent 12.45 percent
- Which of the following is NOT TRUE about bond valuation? *a. Bonds can sell either for a discount or premium.b. The value of the bond does not necessarily equal or the same as its price.c. Bonds pays its cash flows through periodic interest payments and principal.d. None of the choices.please help me analyze and answer the following with formula and explanation please so that i can learn. thank you. Please help me get: Determine the expected rate of return (r) c.) Determine the real interest rateIf you draw the cash flows from any investment, you would have negative cash flows at the beginning, and then you would receive a stream of positive cash flows thereafter. So why do we need the separate concept of a J-curve? In other words, what is the difference between a J-curve and the cash profile of any other investment?
- Most businesses would probably not undertake investment projects for which the expected rate of profit were Multiple Choice greater than the going interest rate. one percent more than the going interest rate. equal to or less than the going interest rate. less than the going interest rate.Questions: Compute the expected intrinsic price of each stock in year 5. Assume that All stocks are fairly priced such that the intrinsic and market values are equal. Dividends are paid at the beginning of the year How many units of each stock will Stephanie buy? Support your response with relevant computations. What will be the total investment cost for shares? Show appropriate calculations. Which bonds are acceptable for investment? Justify your response with suitable computations. What will be the total cost of investment in bonds? Do the stock and bond investments fall within Stephanie’s investment guidelines? Show appropriate computations in support of your response. Will Stephanie have enough funds for her investment in stocks and bonds, when needed? What will be the surplus / shortfall, if any? Given that Stephanie’s bank offers an interest rate of 6% per year, what additional amount should she have deposited as a fixed…A business contemplates building a new manufacturing facility and will need to seek loanable funds of $130 million. It expects that the new facility will yield a 12% return on investment (ROI). Given the current loanable funds market equilibrium depicted in the graph below, is it likely that the firm will borrow the money to build the new facility? Why?