Suppose that your bank is considering investing in a one-year project. The investment will cost $10 million and has an 80% chance of generating $19 million income, a 10% chance of generating $13 million income, a 7% chance of generating $8 million income and a 3% chance of generating nothing.   What information does the Expected Shortfall measure provide which the VaR does not?

Q: On the average, the announcement of an open-market repurchase program can be viewed by investors as…

A: Repurchase of stocks is generally known as buyback of stocks. It is the process in which companies…

Q: Find the accumulated value of ₱ 5,000.00 in 3 ¼ years if it is invested at 15% compounded…

A: Given,  Invested amount = 5,000 I/Y = 15/2 = 7.5% per semi annual N =3.25 *2 = 6.5 semi annuals

Q: The coupon rate is calculated on the bond's face value (or par value), not on the issue price or…

A: Solution:- Coupon amount is the fixed amount paid by the company to its bondholder at every equal…

Q: EPS is computed by dividing net income by the average number of shares outstanding.  True  False

A: Earnings per share(EPS) refers to an indicator or a financial ratio that shows how much a company is…

Q: the present value of the cash inflows/savings

A: Present Value: It represents the present worth of the future sum of money and is estimated by…

Q: 1. The Dow Jones Industrial Average (DJIA30) and the Standard & Poor's Industrial Index (S&P500)…

A: The Dow Jones Industrial Average (DJIA), often known as the Dow 30, is a stock market index that…

Q: Find the future value of a simple interest loan of $2,500 at 8.8% interest for 10 months Give your…

A: Loan amount = $2,500 Interest rate = 0.088 Loan period = 10 months Future value of simple interest…

Q: A 12,000 5% bond with quarterly coupon is priced to yield 5% and redeemable at 110 at the end of 8…

A: A Bond refers to an instrument that represents the loan being made by the investor to the company…

Q: Orono Corp.'s sales last year were $575,000, its operating costs were $362,500, and its interest…

A: As per formula Times interest earned (TIE) ratio = (Sales-Operating cost)/Interest expenses   Where…

Q: 2) If your message fails to present a positive image of you and your organization, you are losing an…

A: External document-like invoice, VAT report, tax returns, annual reports ,etc., are external…

Q: Carefully compare and discuss the concept of margins in forwards/futures markets and options…

A: Margin is the amount that is deposited as a security in the derivative contracts.

Q: What change in the budget deficit will cause the trade deficit to increase, all else the same? A)…

A: Budget deficit is the deficit that occurs when the amount of government expenditure exceeds the…

Q: Inn Corporation had 30,000 ordinary shares of which were acquired during Year 2 for a total…

A: Answer -   December 31, Year 2 ledger balance (30,000 x P65)                  P1,950,000 Cost…

Q: An investor would like to purchase a property worth 10 million shillings. He is faced with two…

A: Property Worth = 10 Million shillings First loan is 80% Time period = 20 years Rate = 8%  Second…

Q: Macaulay duration 11.8100 Modified duration 11.2500

A: Macaulay duration refers to the weighted average period which is up to the maturity of the cash…

Q: A stock has a beginning market value of $70. It can either increase in value 30% each year or…

A: Possible share price at end of year 3: S_uuu = 70*1.3^3 = $153.79 Let S denote share price, u…

Q: Booher Book Stores has a beta of 0.5. The yield on a 3-month T-bill is 3%, and the yield on a…

A: Given Information  Beta of stock = 0.5 Yield on 3 month T bill = 3% Yield on 10 year bond = 8%…

Q: The ABC Company issued a 4 year maturity 12 % coupon bond with a total nominal value of 2.000.000 ₺.…

A: Bonds are debt instruments issued by a company. Usually bonds pay periodic fixed coupon payments to…

Q: 1. What are the techniques used in evaluating investments? List them and explain

A: Capital budgeting is a process used by the companies to use its limited resources to get the best…

Q: The amount by which the balance sheet does not balance at first is called _______. A. total B.…

A: When balance sheet doesn't balance at the first, it means there is some error or mistake which need…

Q: Automatic dividend reinvestment O is a requirement of all mutual fund companies. compounds share…

A: Dividends are the distribution of a portion of a company's earnings, as determined by the company's…

Q: The Dow Jones Industrial Average (DJIA30) and the Standard strial Index (S&P500) have a number of…

A: Dow Jones and S and P 500 are very important in stock market of US and are barometers of US stock…

Q: The Cookie Jar bakes 80 dozen cookies at a cost of $1.08 per dozen. If a markup of 60% on selling…

A: Solution:- Markup means the percentage margin either on cost or sales price.

Q: A 9,000 bond, redeemable at par, pays interest at 5% to yield the purchaser 4%, quarterly for 2…

A: A Bond refers to an instrument that represents the loan being made by the investor to the company…

Q: BNP Paribas has 800 depositors. Each depositor deposits $1,000 into the bank at t=0. BNP Paribas…

A: Simple Interest: Interest refers to the cost of borrowing money.  When the interest is charged only…

Q: A businessman plans on depositing Php 12,500 per month in amount that pay 8% annual interest with…

A: Future value is the value of group of recurring payments for the specified time period with a…

Q: Holly purchased a 182-day T-bill with interest rate of 3.50% p.a. and a face value of $10,000. a.…

A: a. Purchase related; Face value of T-bill = $10,000 Maturity period = 182 days Interest rate = 3.50%…

Q: Olfert Inc. is repaying a loan of $57500 by making payments of $4250 at the end of every six months…

A: Loan repayments in equal instalments at equal intervals of time is called an annuity. Initial…

Q: MG Golf has decided to sell a new line of golf clubs. The clubs will sell for $815 per set, with a…

A: Here, Fixed Cost is 9.75 million Cost of Plant and equipment is $39.2 million Net Working Capital…

Q: 1.Suppose that a client borrows a loan amount of R50,000 at annual interest rate of 10% compounded…

A: Given Information  Amount of loan = R50,000 Annual interest rate = 10% Interest rate is compounded…

Q: Which of the following statements is TRUE? O a. A decrease in the inflation rate will lead to an…

A: A security market line, or SML, is a graphical representation of the expected returns a security…

Q: What is the value of a bond that matures in 12 years, makes an annual coupon payment of $50, and has…

A: The value of the bond is the current price of the bond. It is the present value of the cash flows…

Q: A. What is the monthly payment? Alejandra has a payment of $ a month. B. How much interest will be…

A: Mortgage amortization refers to a schedule which is prepared to shows the periodic loan payments,…

Q: 1. Find the following. Show your derivations b. The continuous time value in 5 years of a note that…

A: Solution: Annuity means a constant same amount paid every period. The accumulated value of these…

Q: The extract balance sheet of a company showed the following: 2020 2021 Debentures 10% £500,000…

A: Solution:- Cash flow from financing activity means flow of cash from sources of capital; either…

Q: It is now January 1, 2022, and you are considering the purchase of an outstanding bond that was…

A: Bonds are those financial instruments that have fixed income and which also help a company to raise…

Q: In a short squeeze.. O A. The short-seller is expected to earn a very positive return if s/he…

A: A short squeeze is an unusual phenomenon where a stock with multiple short sellers actually…

Q: Muthu purchases a shop and mortgages it for RM100,000. The mortgage requires repayment in equal…

A: Loan amortization is a kind of annuity. That is fixed sum of money is repaid at equal intervals. If…

Q: Which investment will help him reach his goal faster? Approximate the time that each investment will…

A: Time value of money (TVM) refers to the method used to measure the amount of money at different…

Q: Zero coupon bonds: a. All of the listed items are correct b. Are close to worthless since the…

A: Zero coupon bonds, as the name indicates, have zero coupons. In other words they do not pay any…

Q: Stock A has an expected return of 12% and a standard deviation of 35%. Stock B has an expected…

A: Expected return on portfolio is the weighted average return on stocks in the portfolio and can be…

Q: Blue Bell stock is expected to return 23 percent in a boom, 16 percent in a normal economy, and lose…

A: Expected Return  (E(X)) = 0.23*0.05 + 0.16*0.90 - 0.32*0.05  = 0.0115 + 0.144 - 0.016 = 0.1395

Q: amoose plc is a company based in the Teeside which manufactures components for the motorised…

A: The Accounting rate of return The accounting rate of return considers the net income of a project…

Q: 9. A project has an NPV of $12 632 when its cost of capital is 12 percent, and an NPV of $6 935 when…

A: To evaluate different projects, we make use of capital budgeting tools. Some of the capital…

Q: Silahis Trading made investments in non-trading equity securities. The cumulative “Holding Gain or…

A: Answer -    Calculation of amount required to debit to other comprehensive income account at the end…

Q: A $100,000 State of Massachsetts bond, 3.5% coupon (paid annually), due 5/11/2032 is quoted at a…

A: A bond is a debt instrument that is used to raise capital by a company, organization, or government.…

Q: Changes in stock prices are impossible to predict from public information.

A: The efficient market hypothesis refers to the market which is efficient and leaves no chance of…

Q: 1. Suppose for an investment of $500, you will receive a monthly payment of $2 for perpetuity…

A: Investment = Present Value = 2*12*1/i 500 = 24/i i = 4.80% p.a. Calculating monthly effective…

Q: You are considering two job offers: Job 1 is a full-time position that pays $58,000 annually and Job…

A: The monthly income in hand is the amount of money we get after all the deductions have been made.

Q: An investor is considering buying a property for shillings 500,000. The cost of land is 20% of the…

A: Here, To Find: Equity IRR =?