Find the numerical value of the factor (P/A,16.3%,15).

Q: 2.2. Suppose £5000 is invested for twenty years, if the interest is compounded annually at a nominal…

A:

Q: The expected inflation rate is 8%. If the current real rate of interest is 4%, what should the…

A: Nominal rate of interest does not take into account inflation factor. But real interest rate must be…

Q: The yield to maturity on one-year zero-coupon bonds is 8.4%. The yield to maturity on two-year…

A: As per the given information: Yield to maturity on one-year zero-coupon bonds - 8.4%Yield to…

Q: Which of the following statements about speculation is true?   A) Society is worse off with…

A: Speculation: Speculation refers to act of taking a position on the prices of commodities,…

Q: I need help with finance homework asap please! Assume that today you made an initial deposit in the…

A: The amount at the end of 10 year will be 22800 in the savings account.

Q: Some investors use the Sharpe ratio as a way of comparing the benefits of owning shares of stock in…

A: Date APPLE TESLA GM 01-10-2020 0.85% 4.46% 2.67% 02-10-2020 -3.23% -7.38% 0.26% 05-10-2020…

Q: There are four similar coupon bonds.If the only differences are their maturities and YTMs.which one…

A: Solution:- Volatility of a bond refers to the change in bond price due to change in market interest…

Q: This question assumes the standard mean-variance utility function. You are allocating your…

A: Minimum variance portfolio helps in ascertaining a portfolio which has highest return for a given…

Q: As risk aversion increases  A. a firm's beta will increase.  B. investors' required rate of return…

A: Risk aversion is the tendency to avoid risk by the investors. Lower the risk, higher stability for…

Q: How much do you have to deposit now with a second deposit in the amount of $700 at the end of the…

A: Second deposit at the end of first year is $700  Amount withdraw at the end of year 2 to 4 is $150…

Q: ou estimate that your cattle farm will generate $1 million of profits on sales of $5.7 million under…

A: Earnings before interest and taxes (EBIT), supposing all other variables remain equal, are more…

Q: (Related to Checkpoint 9.2) (Yield to maturity) The market price is $1,125 for a 17-year bond…

A: Information Provided: Market price = $1125 Bond maturity = 17 years Par value = $1000 Annual Coupon…

Q: Your company is AA-rated by a credit-rating agency, and must borrow money according to the table 1…

A: Projects should be accepted when expected return is greater than interest on money borrowed    In…

Q: 1. Write the Ratio/ Equation to be used, IF REQUIRED 2. Substitute the given 3. Solution (Solve for…

A: Dividend is the distribution of the company’s earnings to the shareholders of the company. A…

Q: (Related to Checkpoint 9.3) (Bond valuation) Doisneau 18-year bonds have an annual coupon interest…

A: Time Period (Years) 18 Par Value   $                                               1,000.00…

Q: Michelle Walker is interested in buying a five year-zero coupon bond with a face value of $1000. She…

A: Face Value = $1,000 Time Period = 5 Years Interest Rate = 10%

Q: (Related to Checkpoint 9.1) (Floating-rate loans) The Bensington Glass Company entered into a loan…

A: Floating rate changes in every period depending on the reference point. When LIBOR is taken as a…

Q: 1) What is meant by risk-neutral valuation? 2) + J Explain the differences between different market…

A:

Q: What are some of the business applications of the time value of money, and what are some of the…

A: Business applications of the time value of money Time value of money has applications in different…

Q: Mr. Cruz borrowed P50,000.00 with interest at the rate of 15% payable ar The debt will be paid,…

A: Loans are paid by the equal amount of installments that carry the payment of interest and payment of…

Q: A car dealer advertises the sale of a car model for a cash price of P880,000.00. If purchased on…

A: Loan amount = Purchase price*(1-down payment) = P880,000*(1-0.35) = P572,000 Required monthly…

Q: A house and lot can be acquired at a down payment of Php500,000.00 and a yearly payment of…

A: First we need to use present value of annuity formula below to calculate annuity value for 10 years.…

Q: Please explain adverse selection problem using an example from banking

A: The meaning of adverse selection: Adverse selection refers to the situation wherein one party has…

Q: (Related to Checkpoint 9.2) (Yield to maturity) The market price is $925 for a 17-year bond ($1,000…

A: Time Period (Years) 17 Par Value   $ 1,000.00 Coupon Rate 8% Market Price   $    925.00

Q: 1. Write the Ratio/ Equation to be used, IF REQUIRED 2. Substitute the given 3. Solution (Solve for…

A: Ratio to be used is given below: Profit Margin %=Net incomeSales×100 Return on Asset %= Net…

Q: Fill in the Balance Sheet. (Do not round intermediate calculations. Round your answers to 2 decimal…

A: As per Bartleby guidelines,If a question with multiple sub-parts are posted,  first 3 sub-parts will…

Q: Question 7 The Federal Funds Rate is O the rate charged on U.S. Treasury bonds by the Federal…

A: The Federal Funds Rate: The rate at which the banks lend funds to each other overnight from their…

Q: This question assumes the standard mean-variance utility function. A pension scheme offers investors…

A: Guaranteed return on cash fund is 1.9% Expected return on balanced fund is 5.50% Volatility on…

Q: An alternative investment product of gorilla glue is expected to generate cash flows of 81,000 every…

A: Cash flow in every 3 years (C = $81,000 Effective annual rate (EAR) = 0.072 Value today of…

Q: important to have an FMS option

A: FMS Stock Options refers to all outstanding options to buy stocks of FMS Common Stock bestowed under…

Q: You wish to finance the purchase of a boat home for $38,400. A finance company offers an APR of 12%…

A: Loan amortization is the process of paying off a loan based on an equal monthly payment. Each…

Q: a. Compute the bond's yield to maturity. b. Determine the value of the bond to you given the…

A: Information Provided: Bond maturity = 13 years Par value = $1000 Coupon rate = 12% Market price =…

Q: counts Receivables ventory tal Current Asset tal Net Fixed Assets tal Assets 0 0 0 1422 61 Total…

A: Balance sheet shows the overall position of the firm in terms of assets and liabilities and equity…

Q: Mr. Joseph Ramos, owner of a GYM is planning to buy an equipment worth P150,000 in his business…

A: Initial cost =150,000 Discount rate = 0.14 or 14%     Net present value (NPV) is the difference…

Q: The unpaid balance at the start of a 28-day billing cycle was $962.84. A $4,000 purchase was made on…

A: Average daily balance method is a way to calculate credit card charges by adding up the daily…

Q: The expected inflation rate is 26.5%. If the current real rate of interest is 21%, what should the…

A: Nominal rate of interest is calculated using following equation Nominal interest rate = [(1+Real…

Q: The nature of financial services carries three implications for new product development. a)…

A: New product development refers to the project that is used for entering the new product in the…

Q: Hudson Corporation will pay a dividend of $4.70 per share next year. The company pledges to increase…

A: Current value = Next dividend / (Required rate of return - constant growth rate) Where Next dividend…

Q: What is the present value of $10,000 paid at the end of each of the next 68 years if the interest…

A: Present value of ordinary annuity may be calculated though following formula   Present Value =…

Q: The date is January 14, 2019. Muhammad can buy T-bill A with a face value of $43,000 maturing on…

A: Tbill A Tbill B Purchase Date 14 January 2019 14 January 2019 Maturity Date 08 March 2019 26…

Q: Local Co. has sales of $10.4 million and cost of sales of $5.7 million. Its selling, general and…

A: It is given that:sales = $ 10.4mil Cost of sales - $ 5.7 mil Administrative expenses = $530,000 RnD…

Q: If the portfolio is 500,000, with the significance level of 1%, what would be the absolute value of…

A: The Value at Risk: The Value at Risk (VaR) is a popular tool in the risk management of portfolios.…

Q: Building Investment. A company purchased a building five years ago for $100,000. Its annual…

A: The Net Present Value: The net present value is a widely used tool to evaluate a prospective…

Q: You want to buy a new sports coupe for $90,500, and the finance office at the dealership has quoted…

A: A.) To calculate monthly payment we will use PMT function in excel. Just simply type =PMT in any…

Q: 1 Conduct a 2-year weighted annual sales forecast for the years 2023-2027. Place your results on the…

A: Weighted average is a forecasting technique where weights are assigned to the previous data. In this…

Q: A man has a simple discount note for $6,100, at an ordinary bank discount rate of 8.53%, for 60…

A: Discount rate is 8.53% Time period 60 days Face value of note is $6,100 To Find: Effective interest…

Q: The following pieces of information are available from the current period financial statements: Net…

A: Given, Net Income = P150,000 Amortization Expense = P28,000 Increase in Supplies = P16,000 Decrease…

Q: Your small toy manufacturing facility has the following information: Revenue per toy $1.19 Fixed…

A: Break even point is the point at which the total revenue is equal to the total cost i.e. no profit…

Q: An analysis of the income statement revealed that interest expense was P60,000. Grant Company's…

A: Given: Income before income taxes =P420,000 Income tax expense =P120,000 Net income = P300,000…

Q: You deposit $1.2 million into your account to cover expenses in the next 12 years. The account earns…

A: Present value of annuity Annuity is a series of equal payments at equal interval of time for a…

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.