What is the quarterly payment of Sonia if she borrowed P300,000 at 7% compounded quarterly that she will settle in 4 years? A P5,484,503.16 B P4,155,149.03 C) P4,155,150 D P21,659.87

Q: How would you use these to evaluate whether or not a current stock price is perhaps to high…

A: The term stock price refers to the current market price of a share of stock, and every…

Q: Morphosis Pty(Ltd) is an investment bank that plans to offer a bursary in five years time to one…

A: Annuity can be defined as a payment made in series of equal instalments at equal intervals of time.…

Q: the interest rate om 56,000 loan is 8.4% compounded semiannually. quarterly payments will years…

A: Given, PV = 56,000Interest= 8.4% Semiannually Compund frequency CY=2 Payment frequecy = PY = 4…

Q: b) What principal will have a maturity value of $40 000.00 at 5.25% p.a. in 4 years? Answer

A: Principal amount can be calculated as: = Amount / (1 + rate)^years

Q: How is the cost of hedging payable will be if a 90-day forward rate of the euro completely estimate…

A: If we are able to completely identify the future spot rate in 90 days from now, then the entity will…

Q: A couple who wants to purchase a home with a price of $340,000 has $100,000 for a down payment. If…

A: Loan Amount (P)=340000- 100000=$240000 Rate of Interest (r)=6%=0.06 n=25 Years=300

Q: Universal Exports Inc. is a small company and is considering a project that will require $650,000 in…

A: Equity = $650,000 EBIT = $155,000 Earning after tax = (EBIT-Interest)*(1-Tax rate)…

Q: Asset A has 3 units of exposure to factor 1 risk and 1 unit of exposure to factor 2 risk and has…

A: We will first take the value of the first factor as x and the second factor as y, then we will solve…

Q: A health insurance policy costs $275/month and pays $100,000 for a major illness. The probability…

A: The expected net profit is the difference between the amount received by the company and the amount…

Q: 1. Juanita inherits $10,000 and invests it for 30 years at a “net” 9% return. How much money will…

A: Investment (PV) = $10,000 Interest rate (r) = 9% Period (n) = 30 Years

Q: Company PLU decides to issue bond to finance its investment in a project. However, the project is…

A: Bond is an agreement between lender and borrower for a certain period of time, which is enclosed…

Q: risk pooling premium actuarially fair insurance premium deductible third party payer moral bazard

A: In the world of finance insurance is an important concept. Insurance is used for the purpose of risk…

Q: Sebastopol Movie Theater will need $180,000 in 3 years to replace the seats. What deposit should be…

A: Future Value  $          1,80,000.00 Time Period 3 Interest Rate 0.80%

Q: In general, which rate yields the larger amount in one year? (A) 13% compounded semi-annually (B)…

A: The rate that would yield a higher value can be calculated by comparing the effective annual rate of…

Q: Which of the following factor is NOT related to increasing an MNC's cost of capital? A. Risk-free…

A: Cost of capital means the rate of return a company is getting its borrowings at. Cost of capital is…

Q: a. Capital Adequacy is at the heart of BASEL II & II accords and Tier 1 & Tier 2 capital plays a…

A: Capital adequacy ratio is defined as the measurement of an availability of capital of the banks,…

Q: Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a…

A: Face value of bond = $1000 Years to maturity  = 10 Years Number of coupon payments = 10 Coupon rate…

Q: a. What is the present value of a 3-year annuity of $110 if the discount rate is 5%? (Do not round…

A: Solution: - When we deposit or pay an equal amount for a number of periods, it is called annuity.…

Q: Two young couples (all about to turn 25 years old) are discussing how to enjoy life. Couple X…

A: Given, Couple X and Y invests $2500 every month Term is 15 years Current age is 25 and investment is…

Q: Charlie wants to withdraw $12,000 each year forever from his account. At an interest rate of 6% per…

A: Annual withdraw = $12,000 Interest rate = 6%

Q: A company’s publicly listed shares:   a. Can be traded on any share market around the world   b.…

A: Listed shares are the common stocks of a corporation that are listed on a stock exchange and thereby…

Q: What is the capital structure of this company based on market values? Bond issue #1, maturity 12…

A: The Capital Structure consists of different sources of funds that are mainly used for financing the…

Q: Use the ordinary annuity formula shown to the right to determine the accumulated amount in the…

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

Q: Given the data in the table and the information below, please answer the following parts. Show all…

A: Here, Here, Forward Rate of 3 year loan starting in 2 year (f2,3) is 0.08% Forward Rate of 2 year…

Q: BP needs to borrow USD3 million in 3 months for a six-month period. To lock in the rate on this…

A: FRA is over the counter contracts where parties determine the rate of interest at which is to be…

Q: t the net cash flows below, what is the value of x if the rate of return is 107 (select the losest…

A: Year Net cash flow 0 -13000 1 -29000 2 -25000 3 X 4 -8000   Required rate of return =…

Q: Adam purchases a retirement annuity that will pay him $1,500 at the end of every six months for the…

A: Semi Annual Payment  $              1,500.00 Time Period (years) 8 Interest rate 4% Monthly…

Q: The electric power supply for a new industrial complex is being planned, and you are asked to…

A: Interest Rate 12% Time Period 25   Alternative A Cost of New construction  $…

Q: Party Supply is trying to decide whether or not to continue its costume segment. The information…

A: Given,

Q: Your company is considering a $1,200,000 capital project that will generate a before tax cash flow…

A: Project cost (C) = $1200000 After tax cash flow (A) = $400000(1 - 0.3) = $280000 n = 6 years r = 14%…

Q: Gas was 3.04 a gallon on Monday. On Wednesday, gas prices increased 6.5%. On Friday, prices…

A: The price of gas on Friday would be calculated as net change in gas price plus the original price

Q: A financial analyst considers three funds. The funds' estimated returns depend on future economic…

A: OUTCOME PROBABILITY FUND M FUND N FUND P A 10.00% -10.00% -25.00% 10.00% B 30.00% 8.00% 10.00%…

Q: Mrs. Nash will contribute $200 to her RRSP at the end of each month for 15 years. How much more…

A: The extra amount that she will have due to increased saving is calculated as difference in amount…

Q: A mortgage for a condominium had a principal balance of $41,400 that had to be amortized over the…

A: Time value of money concept is used for calculation of monthly instalments and calculation of number…

Q: If a friend who’d never heard of amortization before asked you to explain how loan payments work,…

A: Amortization is a technique used in accounting to decrease the book value of such a loan or…

Q: Given the data in the table and the information below, please answer the following question. Show…

A: Here, Maturity (T)      Spot Rate (%) r(1)                          0.15 r(2)…

Q: Ashley received a loan of $1,300 at 4.25% compounded quarterly. She had to make payments at the end…

A: We need to use loan amortization formula to calculate quarterly payment. PMT =P*i1-1(1+i)n where…

Q: If the interest rate is zero, the future value interest factor equals.

A: Time value of money (TVM) is used to measure the value of money at different point of time in the…

Q: Advise the Sampsons on the maturity to select when investing their savings in a CD for a down…

A: A down payment is the amount paid by the purchaser in the early stages of purchasing an expensive…

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

A: Weighted average cost of capital and cost of equity of the project is determined using the below…

Q: Find the monthly payment for the loan. (Round your answer to the nearest cent.) A $506,000 home…

A: The monthly payment of the loan can be calculated with the help of present value of annuity

Q: (16. A 28.5-acre parcel of land in Orange County sells for $4,100 per acre. What is the documen- 16.…

A: The documentary stamp tax rate =0.7003%   Deed amount = 28.5*4100=116850

Q: Complete the following (assume $93,500 of overhead to be distributed): (Round the "Ratio" to 2…

A: Manufacturing cost: The manufacturing cost are the cost which is involved in the production of a…

Q: What is this​ firm's WACC?

A: WACC or Weighted average cost of capital is the weighted average cost of different sources of…

Q: albraith Co. is considering a four-year project that will require an initial investment of $9,000.…

A: NPV or the net present value is an important capital budgeting tool.  It is the value of all future…

Q: share of stock will pay a dividend of $25 in one year, and will be sold fon rice of $500 at that…

A: Share price: Share price is the current market price of the share. It is the price of the share at…

Q: Write the present value function, letting x represent the number of years.

A: Given thatF = future value = $50,000Interest rate = r = 2.8% = 0.028Number of period per year =…

Q: If a piece o property is expected to give benefits to ts owner of $8100 each year for a very long…

A: The present value of perpetuity would give the good estimate of property value given the interest…

Q: Define what is an off-balance sheet activity? Also provide example of an off-balance sheet an…

A: Off-Balance sheet Activity means the assets or liabilities which are not reflected in the balance…

Q: Assume a 9% interest rate compounded annually. What annual deposit is necessary to give $10,000 in…

A: Future Value  $             10,000.00 Time Period 6 Interest Rate 9.00%

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.