According to the Modern Portfolo Theory, which of the folowing is not an important characterstic of each potental investment when we form a portfolo of several securtes?

Q: Megatron Ltd has an equity beta of 1.5. The market risk premium in South Africa is expected to be 5%...

A: Risk Free Rate 9.50% Market Return 5.00% Beta 1.5 Yield On debt 8.00% Debt/Equity 50.00%

Q: The current zero-coupon yield curve for risk-free bonds is as follows What is the price per $100 fac...

A: Zero coupon bond A zero coupon bond is a bond that makes no periodic coupon payments. At the end of ...

Q: E 14956.75 7. Edward Cariaga loans P35,300 at 6½% simple interest, how long it will take him to get ...

A: Simple Interest is the method in which we calculate the interest on a specific principal amount at a...

Q: (Net present value calculation) Big Steve's, makers of swizzle sticks, is considering the purchase o...

A: Investment amount = $90,000 Annual cash inflow = $17,000 Period = 9 Years

Q: Contract size (in number of shares) 1,000 Strike price for an ABC Inc. share 124 Current value of an...

A: Options are the financial derivatives which gives the buyer the right to buy or sell an asset but th...

Q: A 12-year bond has a 9 percent annual coupon, a yield to maturity of  8 percent, and a face value of...

A: The bond price is calculated as sum of present value of cash flows

Q: Phil has systematically contributed $3000 to his RRSP at the beginning of every three months for the...

A: Since you have asked multiple questions, we will solve the first question for you. If you want any s...

Q: Harley worked for many years to save enough money to start his own residential landscape design busi...

A: External rate of return It  is the rate of return on a project  on any  extra  cash from a project ,...

Q: Consider information on the following bonds (with face value 100): Bond Maturity (years) Coupon rate...

A: Spot interest rate can be defined as the rate which is earned by the zero-coupon bond holder by sell...

Q: Calculate the future worth of 20 annual $4,000 deposits in a savings account that earns 8% compounde...

A: Future Value The future value is the amount that will be received at the end of a certain period. Th...

Q: Procter and Gamble​ (PG) paid an annual dividend of $2.86 in 2018. You expect PG to increase its div...

A: Solution:- As per multi-growth dividend discount model, Value of share = [D1 / (1+Re)1] + [D2 / (1+R...

Q: In early​ 2018, Coca-Cola Company​ (KO) had a share price of $43.36​, and had paid a dividend of $1....

A: Solution:- Companies pay a part of their earnings to shareholders, which is known as dividend. Now, ...

Q: XYZ Inc. had the following figures in its Income Statement: (please show solution)   Sales Php 920...

A: Cash inflow consists of sales and other income, whereas cash outflow consists of COGS, salaries, adv...

Q: Farm Foods Company, produces two types of pork loins . Each type of loin consists of white meat and ...

A: pork loins Problem: Selling Price of pork loins (per pound)     pork loins 1 pork loins 2 Sell...

Q: NoGrowth Corporation currently pays a dividend of $1.72 per​ year, and it will continue to pay this ...

A: Solution:- Companies pay a part of their earnings to shareholders, which is known as dividend. Whene...

Q: • Define concept of corporate governance and how important to international financial markets? Outli...

A: International financial markets is defined as the market place, where the financial wealth are trade...

Q: gage debt service ratio? O 70.27% O 62.51% O 90.25% O 56.41%

A: Mortgage debt services ratio is quite extensively used in granting the mortgage loans. That show pay...

Q: You have taken a loan of $5,000.00 for 4 years at 3.6% compounded monthly. Fill in the table below: ...

A: Given: Particulars Amount Loan 5000 Years 4 Interest rate 3.60%

Q: Suppose Franco wants to have P10,000,000 to retire 45 years from now, how much would she have to inv...

A: Present Value:  The present value is the value of cash flow stream or the fixed lump sum amount at t...

Q: Three years ago Samia issued 10 year bonds that pays 5% coupon annually and sells for $1045. Calcula...

A: One of the most important factors in bond valuation is yield. Bonds are compared based on their yiel...

Q: How much is the expected rate of return for Stock A? Use a whole number in percent form, no space, n...

A: Highly favourable probability (P1) = 0.1 Favourable probability (P2) = 0.3 Normal probability (P3) =...

Q: 3. Time Value of Money Assume that ten years from now, you will need $10,000 and that your bank comp...

A: The concept of the time value of money states that money today has more value than the same amount i...

Q: ind the future values of the following ordinary annuities.

A: Future Value of Ordinary Annuity: It refers to the future worth of the annuity cash flows made at t...

Q: In​ mid-2018, some analysts recommended that General Electric​ (GE) suspend its dividend payments to...

A: The share price which is the maximum price to be paid for share consists of dividends and terminal v...

Q: A growing business moved to a new building to service a bigger client pool. The building acquired th...

A: Cost of Building is ₱3,000,000 Interest Rate is 12% Time Period is 5 years Compounding Period is Mon...

Q: Suppose a ten-year, $1,000 bond with a 8.9% coupon rate and semiannual coupons is trading for$1,035....

A: Face Value = $1,000 Coupon rate = 8.9% Bond's price = $1,035.32 Compounded semi-annually 

Q: Here is Eric's credit card statement for the month of August. Transaction Date Transaction amount Au...

A: Here, Beginning Balance is $1,500.25 Purchase on Aug 10 is $68.09 Purchase on Aug 14 is $570.70 Purc...

Q: You plan to invest $1,000 for one year and you have the opportunity to invest it at a 12 percent APR...

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one...

Q: You are asked to evaluate the following project for a corporation with profitable ongoing operations...

A: Net present value is the value of cash inflows earned from a project after deducting the value of th...

Q: 17. Compute the rate (in %) for the loan. Round answers to the nearest tenth of a percent; use ordin...

A: Principal = $54000 Interest rate = r Period = 60  days Interest = $864

Q: You want to be able to withdraw $35,000 from your account each year for 20 years after you retire. Y...

A: Amount to withdraw (W) = $35000 for m = 20 years Let the annual deposit = D Number of deposits (n) =...

Q: You invest in bonds yielding an interest rate of 1.5 percent, utility stock yielding an interest rat...

A: Bonds yield rate is 1.5% Utility stock yield rate is 3.8% Bank certificate yield rate is 7.5% Total ...

Q: Franco is considering investing P18,500 in an investment that will have a maturity value of P32,500 ...

A: Investment amount (P) = P18,500 Maturity value (F) = P32,500 Period = 8 Years Monthly period (n) = 8...

Q: compute the capitalized cost of a new car worth 800,000 if it is estimated that is requires 20,000 p...

A: Purchase price  = 800,000 Annual cost = 20,000 Salvage value = 300,000 Period = 5 Years Interest rat...

Q: Sara met with a financial planner and has determined that she will need $1,250,000 when she retires ...

A: Retirement amount needed (FV) = $1,250,000 n = 30 years = 360 months r = 5.65% per annum = 0.47083% ...

Q: Suppose you want to buy a new house. You currently have $15 000 and you figure you need to have a 10...

A: Current amount (P) = $15000 House cost = $150000 Down payment and closing costs needed (F) = (10% + ...

Q: Sammie Jo wants to begin saving for her retirement in 35 years. She researched and found an annuity ...

A: The question is based on the concept of future value calculation for annuity payment, the annuity pa...

Q: /C ratio (modified) of a building that houses students during their classroom discussion. The accomm...

A: B/C is the ratio of  present value of annual benefits to present value of all cost. If it is more th...

Q: National Co. make these assumptions for valuation purposes: a.  The firm consists of a single asset ...

A: Dividend Discount Model refers to a model which is being used in order to predict or find out the pr...

Q: Dick Eckel recently set up a TDA to save for his retirement. He arranged to have $135 taken out of e...

A: Future value is compounding all intermediate cashflows to future point of time. It helps to ascertai...

Q: a) Calculate total current assets. Total Current Assets: $ b) Calculate total lorg-term assets. Tota...

A: Current assets are the assets used by the company to pay its current liabilities. These assets are a...

Q: A five year P1,000 par value bond pays a 5% annual coupon. Given a YTM of 7%, what is the price of t...

A: The present discounted value of a bond's future cash flow is generally known as the bond price. The ...

Q: You are a manager at Percolated​ Fiber, which is considering expanding its operations in synthetic f...

A: Here, Cost of Capital is 10% Cost of the Equipment is $19,000,000 Working Capital is $7,000,000 Part...

Q: The option is currently a.) In-the-money b.) At-the-money c.) Out-the-money 2.) In/At/Out- the m...

A: The call option give opportunity to buy the currency at the specified price and at specific date but...

Q: Weekly (Feb 21-27) Projected Actual Difference Food Cost $6,971 $7,842 +$871 (over) Beverage Cost $3...

A: Solution:- ‌If the entity has higher revenue in actual than the costs, it means the company has earn...

Q: A civil engineer plans to own a 300 m² lot after 5 years for an estimated cost of 570,000. To accumu...

A: Compounding is a process of reinvestment. In this process the investments and the gains that are ear...

Q: Red Company financing has a total assets of P500,000 and total liabilities of P300,000 at the end of...

A: The company has limited liability which means the shareholders are liable to the extent of contribut...

Q: 2-year zero coupon bond has a face value of £100 and a price of £92. A three year zero coupon bond h...

A: Zero coupon bond do not have any coupon and they are traded at discount and cash out on face value o...

Q: Which of the following is correct when the company is deciding if it will undertake an additional fu...

A: AFN is a tool for estimating how much money a business will need in the future. A corporation that w...

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.