then the present value factor of the lumpsum is:

Q: Stock A has an expected return of 5% and a beta of .7. Stock B has an expected return of 9% and a…

A: Portfolio beta = (Weight of A * Beta of A) + ( Weight of B * Beta of B) Let's assume Weight of B = Y…

Q: Required: a. How much would it cost to purchase if the desired put option were traded? (Do not round…

A: Value of share = $110 It can increase by 5% or decrease by 5% T-bill rate or risk-free rate = 4% If…

Q: Loudoun Trucking purchases 4,750 truck tires. The federal excise tax is $0.13 per tire. Find the…

A: Excise Tax = truck tires * Excise tax rate

Q: 4. Consider a 10 year semiannual bond redeemable at par that yields a nominal annual rate of 8%…

A: Solved using Financial Calculator  N = 10* 2 = 20 I/Y = 8/2 = 4 PMT = 6/2 = 3 FV = 100  CPT PV = -…

Q: total return will you have earned over the year? What was your dividend yield? Your capital gain…

A: Given Information:  Purchase Price (Po) = $101 Expected Dividend (D1) = $7 Expected Price after 1…

Q: Based on the following stock price and shares outstanding information, use the Dow Jones industrial…

A: Particulars  31 Dec 2018 Shares Outstanding 31 December 2019 Shares Outstanding Stock K 20…

Q: Janae pays $10,500 for shares in a new company. She sells the shares 10 years later for $21,500.…

A: Annual return  = [( Ending value/ Initial valu)(1/n)] -1

Q: DO NOT ANSWER IN EXCEL Q#4. Suppose Hillard Manufacturing sold an issue of bonds with a 10-year…

A: Given, In this question the information regarding the Hillard manufacturing is provided,

Q: Treasury bill yield is 10%, ABC company’s expected return for the next year is 18%, beta of ABC…

A: Thee market return can be calculated with the help of CAPM equation

Q: What is a letter of credit? A bill of lading? A draft?

A: Credit is referred as the trust, which helps in allowing one party to provide the funds or resources…

Q: Wisdom Tree U.S. Total Earnings Fund (EXT) returns for the past 5 years have been: 2015 -2.30 % 2017…

A: Question 8 - Solved using excel Correct option - A ; 13.60%

Q: What would be your dollar return had you purchased a single contract at the call premium when the…

A: The difference between the selling price and the current price of an underlying asset is known as a…

Q: A local business received a $45,000 loan at 4.95% compounded semi-annually. The business settled the…

A: Here, Value of Loan is $45,000 Interest Rate is 4.95% Monthly Payment is $650 Compounding Period is…

Q: What is the operating income (EBIT) for both firms? Round your answers to the nearest dollar. Firm…

A: EBIT refers to earnings before interest and taxes. It is also known as operating income in the world…

Q: Calculate the reduced paid-up insurance for Lee Chin, age 41, who purchased a $310,000 20-year…

A: An endowment policy is essentially a life insurance policy that, in addition to insuring the…

Q: What can be done by a business to mitigate: Execution risk Technology risk Reputation risk…

A: Risk management  Risk management is the identification, evaluation, and prioritization of risks…

Q: How much did he have after the 10 years?

A: Principal amount deposited = $1000 Simple rate of interest = 10% p.a. Time period = 7 years Simple…

Q: Use the following to answer questions 11 – 15 AL issues 4.0%, 20-year bonds with a face amount of…

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

Q: Given recent evidence concerning the CAPM, which of the following portfolios might be expected to…

A: An asset that plots above the SML is considered an undervalued asset as it provides a return larger…

Q: A highway bridge is being considered for replacement. The new bridge would cost $X and would last…

A: The maximum acceptable price would be the cost of existing bridge and also the benefit from the new…

Q: Can you please help me solve for the Return on Investment and Break-Even Point based on the data…

A: Return on Investment measures of the performance of an Investment. It tells us the return we have…

Q: Risk in the widest sense is not new to business. All companies are exposed to traditional business…

A: The process of recognising, assessing, and accepting or limiting uncertainty in investment decisions…

Q: aim settlement, the

A: Building and personal property coverage form is insurance that covers the physical damage which is…

Q: The required end of month payment on a 3-year loan bearing interest at 8.5% compounded monthly is…

A: The original amount of loan is calculated as present value of monthly payments

Q: Which financial ratios would you recommend to evaluate a company's solvency? Once these ratios are…

A: To evaluate company solvency,  Solvency ratios are the company long-term ability to cover the…

Q: 25. Sarah is taking out a $24,400 four-year new-car loan with an APR of 6.88%. What is the finance…

A: Present value of loan=$24400 APR=6,88% n=4 years

Q: Stargate Corporation is considering two projects of machinery that perform the same task. The…

A: Net present value is the difference between Present Value of cash Inflows and Initial Investment.…

Q: d) What are the key developments in electronic banking does in recent time? How h a s it become so…

A: The advancement and progression of information and communication technology, combined with the…

Q: Which type of bond is likely to pay a coupon payment that is varying (i.e. it changes over time) ?…

A: The Correct Option is 'B. TIPS'

Q: At age 30 you deposit 150 pesos at teh end of each month into SSS that pays 4% interest compounded…

A: Future Value of Ordinary Annuity refers to the concept which determines the sum total of all the…

Q: Andrew Industries is contemplating issuing a 30-year bond with a coupon rate of 7.15% (annual coupon…

A: A bond is a debt instrument that is used by a company to raise capital. Like loans, it has to be…

Q: The problem describes a debt to be amortized. (Round your answers to the nearest cent.) A man buys…

A: Loans are to be paid by the periodic payments that carry the payment for the principal amount and…

Q: What is the legal rights of stockholders (common and perferred).

A: Stockholder:  A stockholder is also known as a corporate shareholder or an individual who owns at…

Q: What is the payback period for the new machine

A: Payback Period: It is the period in which the initial outlay of an investment or equipment is…

Q: Jack asked Jill to marry​ him, and she has accepted under one​ condition: Jack must buy her a new…

A: Price of new Rolls-Royce Phantom (FV) =$350,000 Amount available for investment (P) = $59,840 Annual…

Q: Replacing old equipment at an immediate cost of $40,000 and an additional outlay of $25,000 three…

A: Immediate cost = $40,000 Additional outlay in three years = $25,000 Annual savings = $15000 Period =…

Q: A bank loaned out $7,500, part of it at the rate of 12% annual interest, and the rest at 14% annual…

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

Q: TRADE NUMBER RANDOM PRICE CHANGE STOCK PRICE NUMBER 1 45 +3/8 +1/8 +1/8 +1/2 2 95 3 72 4 69 99 53 7…

A: Trade number Random Number Price change 1 45 0 2 95 0.375 3 72 0.125 4 69 0.125 5 99 0.5…

Q: a. calculate the payback period for each project. b. calculate the net present value for each…

A: Payback period is the time required to recover the cost of investment. Payback period = ((Year of…

Q: Calculate the YTM for the below Bonds using the Interpolation Method:

A: Yield to maturity refers to the total return generated by a bond until it matures. Yield to maturity…

Q: There are six laws that regulate consumer credit in the United States. The one that protects credit…

A: The Correct option is 'a. Fair Credit Reporting Act'.

Q: A promissory note has a face value of 22275.00 and it has a date of issue of November 15 this year.…

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

Q: The 6% coupon rate ABC bond has a price of $1,050, interest paid semi-annually, and two years…

A: Given That: Bond Price= $1050 Coupon Amount=1000×6%×612Coupon Amount=$30 n=2 years=4 semi- annual

Q: a) In each of the following parts, write an expression that shows the relationship among the listed…

A: Bonds are debt instruments which are used as an instrument to raise funds. Issuer who raise debt has…

Q: Briefly define each of the five key financial assets. Is every financial asset also a financial…

A: Financial assets is defined as the liquid asset, which gets their value from the contractual right…

Q: Suppose you have a 2-year bond with a coupon rate of 5% and a yield to maturity of 6%. This bond's…

A: Here, Modified Duration is 1.952 years

Q: Sugar Sweet (SS) Company produces and sells 7,000 specialty Treats per year at a selling price of…

A: Given, information regarding Sugar Sweet (SS) Company that produces and sells 7,000 specialty…

Q: A stock's current price is $50. Suppose the two possibilities for its price in a year are $60 and…

A: The binomial option pricing model is a method of finding out the value of options in case of varying…

Q: importance of the Technique

A: Capital budgeting refers to the process undertaken by the business for evaluating the projects or…

Q: Please provide the given, required, and complete solution with units. Thank you. At age 30,…

A: As the number of compounding increases the effective interest rate increases and there is more…

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.