1. Discuss the functions of financial intermediaries.

Q: Sumami Ink considers replacing its old machine. The old machine’s current market value is $2 million...

A: Cost of new machine in year 0 is $3,000,000 Book value of old machine = $1,000,000 Market price = $2...

Q: An up-and-coming band is releasing their first album on Spotify on 3/4/2022. They make an initial in...

A: An initial investment of $3,200 on 2/28/2022. The first check on 3/4/2022 to be $100 and the check a...

Q: 3a) The company issues a note to an entity to borrow cash for five years and will pay $500,000 to th...

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

Q: he future value for the ordinary annuity with the given payment and interest rat MT = $700; 1.20% co...

A: Future value of annuity is the amount consist of deposit and interest accumulated over period of tim...

Q: You are a manager at Percolated Fiber, which is considering expanding its operations. Your boss said...

A: Depreciation is a non cash expenses. So this expense should be added back to calculate the free cash...

Q: how long will it take in years for sarah to save $10,000

A: Future Value or Amount to be saved (FV) = $10,000 Periodic Payment (PMT) = $300 every six months Int...

Q: Read the scenario below and a nswer the questions that follow: Natural Guard (Pty) Ltd Natural Gua...

A: Managerial accounting and financial accounting There is a vast difference between managerial account...

Q: You’re buying your first house for $180,000, giving $35,000 as down payment. The amount you will fin...

A: The amount of interest payable over the term of the loan and the loan amount due is equal to the tot...

Q: The one-year spot rate is 8 percent and the two-year spot rate is 10 percent. What is the price of a...

A: Hi, since there are three separate questions, we will answer the first one, as per authoring guideli...

Q: 00 par value bond that has an 8% coupon rate, pays a semi-annual coupon, matures 2 years from today,...

A: Macaulay duration is weighted average duration of bond considering the cash flow from bond. It is us...

Q: 5. The average car depreciates at a rate of 20% the first year after purchase and 15% every year the...

A: Cashflows means movement of cash. This movement can be positive and negative. Positive movement mean...

Q: It is the annual interest investment + annual operation and maintenance + annual depreciation cost.

A: The annual interest investment, annual operation and maintenance and annual depreciation costs are t...

Q: For which of the following purposes is it LEAST logical for a company to issue equity securities on ...

A: Equity refers to the owner's funds. It is that portion of the capital of a business that is financed...

Q: Which one of the following measures is relevant for assessing exposure to systematic risk?

A: Systematic Risk: It refers to the risk caused by factors that are not in the control of an organizat...

Q: An investor with a required return of 12 percent for very risky investments in common stock has anal...

A: We will use the dividend growth model to find the prices of stock A, Stock B, and Stock C. We will t...

Q: Consider a $100 par value bond that has an 8% coupon rate, pays a semi-annual coupon, matures 2 year...

A: Par value = $100 Coupon rate = 8% Semi-annual = 2 times in a year maturity = 2 years Yield = 6% 

Q: 2. The Nedtran family decides to save money for a vacation in 3 years. They purchase an annuity with...

A: Semiannual payment (A) = P 10000 Interest rate = 9% compounded quarterly n = 3 years = 6 payments Le...

Q: Today, you invest P 100,000 into a fund that pays 25% interest compounded annually. Three years late...

A: This is the problem of the time value of money. we will compute the amount at each transaction and t...

Q: Handley Bank advertises that its standard lending rate is 12% per annum compounding monthly. Which o...

A: The effective rate is the actual rate that we get if we take the frequency of compounding into consi...

Q: Consider the following information for stocks A, B, and C. The returns on the three stocks are posit...

A: Risk free rate (Rf) = 4.5%  

Q: Aldo's Shoes bought a shipment of 656 pairs of women's shoes for $25.00 per pair. The store sold 176...

A: Since you have posted a question with multiple sub-parts, thus we will solve first three sub-parts. ...

Q: Are synthetic CDOs a legitimate business investment, or are they pure gambling? If the former, what ...

A: Workplace ethics is concerned with how employees act in the workplace, as well as their morals and a...

Q: What is the total interest paid on a loan of $5,000 at APR = 8% for one year.

A: Loan amount (LV) = $5000 Interest rate (r) = 8% Period (n) = 1 Year

Q: A certain annuity pays $108 at the end of every 3 months. If the present value of the annuity is $1,...

A: Annuity means a set of finite number of payments which are made in equal time intervals and same in ...

Q: what are the meaning of Revenue Enhancement and Cost Saving ? and I need examples for each.

A: Revenue enhancement is the enhancement or increase in the revenues which also leads to an increase i...

Q: A young woman 22 years old has just graduated from college. She accepts a good job and desire to est...

A: Current age = 22 Years Annual deposit (P) = P2000 Interest rate (r) = 15% Future value (FV) = 1,000,...

Q: What is the monthly payment on a loan of $5,000 at APR = 8% for one year.

A: Loan amount (LV) = $5000 Interest rate = 8% Monthly interest rate (i) = 8%/12 = 0.666666666666667% N...

Q: Below are two T-Bill purchases: A T-Bill with a face value of $900,000 and current market price of ...

A: A money market instrument is a most liquid financial security as compared to other financial securit...

Q: The present worth of P 40,000 in the first year and amounts of decreasing by P 3000 per year through...

A: First year amount = P 40,000 Annual decrease = P 3000 Interest rate = 14% Period = 5 Years  

Q: 1234n For the cash flows shown, the equivalent annual worth in periods 1 through 5 at an interest ra...

A: The annual worth method is a method of finding the profitability of a project. In this method, all i...

Q: Beginning Balances for Quentin's Four Credit Cards Card A Card B Card C Card D Balance $4,134.00 $2,...

A: The value of interest payable over the term of the loan and the loan value due is equal to the total...

Q: Woidtke Manufacturing's stock currently sells for $36 a share. The stock just paid a dividend of $1....

A: Dividend refers to the amount which is announced by the company and is given to the shareholders wit...

Q: In five years, P 20,000 will be bedded to pay for a building renovation. In order to generate this s...

A: Here we will have to find the future value of the annuity at the end of the 3rd year and then conver...

Q: Beginning Balances for Quentin's Four Credit Cards Card A Card B Card C Card D Balance $4,134.00 $2,...

A: Amount of Interest paid can be calculated as the difference between the total amount paid through in...

Q: deposits per deposit was Php 20,000 and each deposit thereafter was 2,000 les the preceding one. Det...

A: We need to find the future value of all deposits at the end of the 6th year as the sixt deposit will...

Q: A contractor bought a concrete mixer at P 150,000 if paid in cash. The mixer may also be purchased b...

A: Cost of mixer (PV) = P 150,000 Interest rate (r) = 8% Period (n) = 5 Years Annual payment = P

Q: A company has 35% of its balance sheet as debt with a total amount of assets of EUR 17,000,000.If th...

A: Weight of debt = 35% Weight of equity = 100% - 35% = 65%

Q: The demand function for FreshFood Exclusive Brand's product is D = 80 - 2p , where D is the number o...

A: D = Number of units p = Price per unit D = 80 - 2p

Q: Suppose you held a diversified portfolio consisting of a $7,500 investment in each of 20 different c...

A: Portfolio consists off = 20 stocks Investment of each stock = $7,500 Portfolio beta = 0.95 Selling s...

Q: Cool Stuff, Inc. uses 800 units of a product per year on a continuous basis. The product has carryin...

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question...

Q: Bond X is a premium bond making semiannual payments. The bond has a coupon rate of 9.3 percent, a YT...

A: The price of bond will be sum of the present value future coupon payments and the present value of f...

Q: A loan is to be amortized by a group of five end of year payments forming an ascending arithmetic pr...

A: A loan is a sum of money borrowed from a third party, such as a bank, and returned over time in pred...

Q: An amount of $1500 is deposited for 6 years in an account that earns 7% interest. (Round your answer...

A: Simple interest is calculated as: = Principal * Rate of Return * Time, However, compounded rate of r...

Q: Why insurance companies important for individuals and businesses?

A:

Q: The buyer of a certain machine may pay either Php 20,000 cash down payment and Php 20,000 annually f...

A: Method 1 Down payment = Php 20000 6 annual payment amount = Php 20000   Method 2 Down payment = Php ...

Q: What nominal rate compounded quarterly can be charged to a payment at a nominal interest rate of 12%...

A: Effective Annual Rate The effective annual rate of interest is the actual or the real rate of intere...

Q: An investor bought 200 CYH shares at P50.00.  He received cash dividends of P2.00 per share.  The co...

A: Given: Shares bought = 200 Price = 50 Cash dividend = 2 Stock split = 2:1

Q: 5. Stock A has a beta of 0.50 and Stock B has a beta of 1.25. Suppose if is 4% and Rm 1S 10%. a. App...

A: Solution:- As per security market line, ie. Formula of Capital Asset Pricing Model (CAPM),  E(R) = R...

Q: Luke earned P4200 in interest from his simple interest account over the last 3 years. The account pa...

A: Simple interest (I) = P4200 Period (t) = 3 Years Interest rate (r) = 1.75%

Q: In a sequence of 10 annual payments of 2,000 pesos each, the first one is due at the end of 6 years....

A: An annuity is a series of regular and equal cash flows. The present value is the discounted value of...

Functions of Financial Institutions

Financial institutions are businesses that are formed to deal with financial and monetary transactions. These organizations primarily accept deposits, advance loans, make investments, and provide foreign exchange services. Financial institutions include, but are not limited to, banks, insurance companies, trust companies, brokerage firms, and investment bankers. Because financial institutions play such an important role in the economy in terms of monetary transactions, regulating their activities has become a requirement for governmental authorities. As a result, the government creates a multitude of laws and regulations to oversee the activities of financial institutions.