We learned that if the market interest rate for a given bond increased, the price of the bond would decline. Applying this same logic to stocks, explain (a) how a decrease in risk aversion would affect stocks' prices and earned rates of return; (b) how this would affect risk premiums as measured by the historical differences between returns on stocks and returns on bonds; and (c) what the implications of this would be for the use of historical risk premiums when applying the CAPM equation.

Q: The future value of an investment increases as the number of periods increases   True or Fase

A: Future value means the value of investment after x period of time compounded at the interest rate.  

Q: The __________ is used to determine a sole proprietor’s or company’s worth by listing all the assets...

A: A balance sheet is a financial statement that shows the assets, liabilities, and shareholder equity ...

Q: Report on Corporate Lawsuits- BANK OF AMERICA- $16 BILLION. Write COMPANY BACKGROUND for about 600-7...

A: Attorney General Eric Holder and Associate Attorney General Tony West announced on august 21, 2014 t...

Q: Use the following information to answer Multiple Choice Problems 16 to 23: Future Electronics Corp. ...

A: We will consider the whole project details for computing the initial cash flow, cash flow at year 3,...

Q: What is the future value of $1,540 invested for 5 years at 5% interest compounded monthly?

A: Future value = Present value(1 + Rate)^Time where, Present value = $1,540 Rate = 0.05 / 12 = 0.00416...

Q: 2021 MARKET  DATA Market Price $193.42 Shares Outstanding (M) 13.7 Tax Rate 18.80% What is S...

A: Capital expenditure (or capex) is the amount spent in buying new plants, equipment and machinery.

Q: Assume you put $400 per month into a retirement account for 14 years, and the account has an APR of ...

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

Q: Synovec Corporation is expected to pay the following dividends over the next four years: $6.10, $17....

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

Q: c f P5000 iš ich year a single payment of osited in an account that earns 16% pounded continuously. ...

A: The future value of the annuity includes the amount deposited and amount of interest accumulated ove...

Q: For each of the companies described here, would you expect it to have a low, medium, or high dividen...

A: Dividend payout ratio indicate how much earning of a company is paid to shareholder as a reward in t...

Q: If an Investment of $5000 will grow to $8000 in four years with quarterly compounding the effective ...

A: We will find the interest rate by applying the requisite formula where we can use the amount 8000 an...

Q: SME Balance Sheet 2021 2020 Assets (in millions) Cash 85.960 56.460 Receivables 89.560 80.6...

A:

Q: younger brother's savings account, with the first deposit being made on your brother's fifth birthda...

A: The present value is the amount without interest and future value is the amount with accumulated int...

Q: Regarding MM 1958 proposition, a firm's value is not influenced by O interest rate paid on debt. req...

A: Modigliani-Miller's approach is considered to be one of the most important theorems in corporate fin...

Q: What is the accumulated value of deposits of $1020.00 made at the end of every six months for three ...

A: Accumulated deposits include the amount deposited and compounding interest accumulated over the peri...

Q: c) Suppose you observe the following three bonds. Assume that all bonds are denominated at $100 face...

A: Bonds are the debt securities which are issued by the corporations or the government to arrange the ...

Q: You have been accepted into college. The college guarantees that your tuition will not increase for ...

A: Present Value can be calculated using PV function in excel   PV (rate, nper, pmt, [Fv], [type]) Rat...

Q: Stream Tube made $15 billion worth of revenue this year. The total market for streaming television s...

A: Solution:- Market share means the proportion of a company in the entire industry.

Q: pleased to see that you have been given a 5.62% raise this year. However, you read on the Wall Stree...

A: Purchasing power is the ability to buy the goods with given money but inflation is one important fac...

Q: QI: you put $ 2500 in account bank , this bank gives interest 6.5% for the first 3 months of saving ...

A: Interest is the cost which the borrower has to bear on the loan taken. interest is of two kinds. It ...

Q: Trade off Theory states that:

A: The capital structure of a company can be defined as the proportion of debt and equity used by a com...

Q: Assume you put $400 per month into a retirement account for 14 years, and the account has an APR of ...

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

Q: Yusra has a term loan that she still owes $15,483.58. The annual interest rate on this loan is 3.97%...

A: Given, The amount of loan owed is $15,483.58. Annual interest rate is 3.97%. Monthly payment is $434...

Q: A financial institution uses a loan base rate of 4.35% and sets the credit risk premium at 6.68%. Th...

A: Given: Loan origination Fee LOF = 1.5% Base loan rate = 4.35% Credit risk premium CRP = 6.68% Compen...

Q: Find the future worth factor of an annual payment for 15 years at 13 % compounded annually.

A: Time Period = 15 Years Interest Rate = 13%

Q: Ethan wants to set up a fund for his son's education such that he could withdraw $2,982.00 at the be...

A: Quarterly withdrawal (P) = $2982.00 Period = 6 Years Number of quarterly periods (n) = 6*4 = 24 Inte...

Q: Find the payment made by the ordinary annuity with the given present value. $216,967; quarterly paym...

A:

Q: Catherine obtained a loan of $40,000 at 4.5% compounded monthly. How long (rounded up to the next pa...

A: Solution:- When a loan is taken, the borrower is given the option whether to repay it in installment...

Q: Wells Leasing Company signs an agreement on January 1, 2020, to lease equipment to Manchester Compan...

A: Cost of asset = $250000 Fair value of asset = $ 250000 Residual value = $ 25000. But it is not guran...

Q: If a student's time value of money rate is 24%, then the student would be indifferent between $77 to...

A: Interest rate (r) = 24% Present value (PV) = $77 Period (n) = 1 year

Q: A ShanmukhaRao Kosuri Pvt. Ltd. has a target capital structure of 65 percent debt and 35 percent equ...

A: Cost of capital = (Cost of debt x Debt percentage) + (Cost of equity x Equity percentage)

Q: larger will the value of an RRSP

A: RRSP stands for Retirement saving plan refers to the financial plan which is used for saving and inv...

Q: A 5-year project will require an investment of $100 million. This comprises of plant and machinery w...

A: Given: Life of the project is 5 years Cost of machine is $80 million Working capital = $20 million T...

Q: Consider a two period economy. You can buy stocks in period 0, and then sell them in period 1. You c...

A: Here; We have Stock price =$100 Dividend Yield is zero as stock pays no dividend Time period is 1 ye...

Q: If a down payment of P600,000 is made on a house and P80,000 a year for the next 12 years is require...

A: Down payment (DP) = P600,000 Annual payment (P) = P80,000 Number of annual  payments (n) = 12 Intere...

Q: Write the 4 Formulas for Uniform Annuity Series 1 Find F/A 2 Find P/A 3 Find A/P 4 Fina A/F 5 P (Pr...

A: An annuity is a series of equal payments made over a set period of time. While payments in an ordina...

Q: he total revenue numbers over the past 4 years for Tag-It Corporation were as follows (values in mil...

A: Fist we need to do a trend analysis in the sales of last 4 years. If growth rate is near to 12% than...

Q: 1. XYZ Corporation's most recent balance sheet and income statement appear below: XYZ Corporation St...

A: To Find: Working capital Current ratio Acid-turnover ratio Accounts receivable turnover Average col...

Q: If the rate of inflation is 4.8%, what nominal interest rate is necessary for you to earn a 2.2% rea...

A: Inflation rate = 4.8% Real rate = 2.2%

Q: A 5-year project will require an investment of $100 million. This comprises of plant and machinery ...

A: Cost of equity refers to the return that is required if an investment is made either by a company or...

Q: Suppose that shares of FC Inc. are trading at $100. Consider an American put option with strike pric...

A:

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

A: Solution:- When an entity is unable to achieve what it has projected, it reviews the standards and a...

Q: at  11 1 2%  interest for four years. (Round your answers to the nearest cent.) (a) Find his month...

A: Fist we need to use loan amortization formula to calculate monthly payment of loan. PMT =P*r1-1(1+r)...

Q: 6. Market value ratios Ratios are mostly calculated using data drawn from the financial statements o...

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

Q: 2

A: Step 1 The risk premium is closely linked to the risk abhorrence; The greater the abhorrence of the ...

Q: Write the 4 Formulas for Uniform Annuity Series 1. Find F/A 2. Find P/A 3. Find A/P 4. Fina A/F 5. P...

A: Annuity is a series of equal cash payment or receipt in equal intervals of time. Perpetuity can be d...

Q: XYZ Ltd. cash budget forewarns of a short-term surplus. Which of the following would be the appropri...

A: The Surplus cash means that the business have extra cash inflows coming into the business. The cash ...

Q: You’ve just joined the investment banking firm of Dewey, Cheatum, and Howe. They’ve offered you two ...

A: We need to calculate present value of both options by using present value of ordinary annuity formul...

Q: As a Businessman and Entrepreneur, which do you think is more important between Return On Asset (ROA...

A: ROA is the return on assets and ROI is the return on investment.

Q: Sun Life Financial Trust offers a 360 -day short -term GIC at 0.65 %. It also offers a 120 -day shor...

A: Given: 360 day GIC rate = 0.65% number of days = 360 120 day short term rate = 0.58% number of days ...

Real Estate

Real estate means ownership of land along with the assets and natural resources that exist on the land. These properties are in real/physical form which is tangible. Real estate simply means land or addition made to land permanently like constructing a residence or different buildings. People invest in real estate to either reside or for wealth creation. Many people investing in real estate further lend the place for occupation or businesses in return for a monthly payment.