What is the relationship between financial decision-making and risk and return? Would all financial managers view risk-return trade-offs similarly?

Q: 2. Stephen has the option of receiving $50,000 in 20 years, or $12,000 today. Stephen's rate or retu...

A: The option is selected which has the highest present value.

Q: Blackpink Co. has 5% preferred stock with a par value of P 100. Selling price is P 123.50 per share ...

A: Money paid on an annual basis to the preferred stockholders for the issue of preferred stock is the ...

Q: ast year Janet purchased a $1,000 face value corporate bond with a 10% annual coupon rate and a 20-y...

A: Frist we need to calculate the price of bond. The price of bond will be the present value of all cou...

Q: Given data:             Sales  $2,000.000             OpCap  $1,120,000             Wacc 9%         ...

A: We can calculate the value to operation for year 0 by taking the cash flows and discounting them bac...

Q: Old MathJax webview Bootstrapping technique is often used to construct a zero-coupon yield. a. Using...

A: Data given: 1-year LIBOR rate =2.5% p.a. 3-year zero yield = 5% p.a.   Let us assume ZCB1, ZCB2 and ...

Q: Suppose you created a two-stock portfolio by investing $50,000 in High Tech and $50.000 in Collectio...

A: To Find: Portfolio expected return Standard deviation of portfolio Sharpe ratio CoV

Q: Fact Debit Card Credit Card Both Money is borrowed and repaid at a later date Money is automatically...

A: Debit cards: Debit cards are form of cash which helps in online transactions without using physical ...

Q: Discuss the major features of the federal income tax system

A: In USA federal income tax is collected by the federal government.

Q: 26. Mr. Cruz wanted to buy a house and lot worth P5M ten years from now so he decided to invest his ...

A: Since you have asked multiple questions, we will solve the first question for you. If you want any s...

Q: Problem 2: Contribution margin income statements for Beyonce Couture and Rihanna Cosmetics for the y...

A: Solution:-We know, Operating Leverage = Contribution margin /  Operating Income  

Q: A contract requires lease payments of $700 at the beginning of every month for 4 years. a. What is t...

A: We need to use present value of annuity due formula to calculate present value of contract. PV =PMT1...

Q: What is the projected probability of default for the borrower? What is the projected probability of ...

A: Probability of default of a loan can be defined as the probability of a loan applicant not repaying ...

Q: Scenario 1. John invests $10,000 in a 3-year CD. The earning is 8% APR compounded monthly. (a) What ...

A: "Hi, Thanks for the Question. Since you asked multiple questions, we will answer first question for ...

Q: A bond is currently trading at pond be with a -55 basis point change in the yield and a du Round vou...

A: Duration of bond show the change in price of bond with respect to change in yield on the bond.

Q: 12. Calculating EAR Find the EAR in each of the following cases. Stated Rate (APR) Number of Times C...

A: The true or the actual interest earned from an interest-bearing asset or interest paid on loan for a...

Q: When the total interest charged is linearly proportional to the initial amount of the loan, the inte...

A: Interest is an additional amount that is charged on deposited amount for a period. Interest is an ex...

Q: The spot rate of Japanese yen is $0.008, and the spot rate of peso is worth $0.590. How many peso do...

A: 1 Japanese yen = $0.008 1 Peso = $0.590

Q: List and briefly define the five risk-management strategies that are available.

A: The risk management strategies refers to the various methods to treat or manage the risk. The follow...

Q: Using a debit card will take money directly out of this Checking Savings Both account Best for money...

A: Checking account - It is a type of bank deposit account that is meant for daily money transactions. ...

Q: Mr. Cruz wanted to buy a house and lot worth P5M ten years from now so he decided to invest his mone...

A: Compounding is a method of charging interest in which Interest is charged on the amount including or...

Q: Monthly Excess return for Stock 1 Market returns Monthly Excess 0.09 0.03 -0.07 0.01 0.02 0.02 Avera...

A: Beta is the value used to denote riskiness of a security with the market level of returns. It is det...

Q: Find the interest earned on an investment of $10,000 into a money market account that pays a simple ...

A: Investments are made to earn interest income. The interest may be earned by way of simple interest o...

Q: How much money, Ap, should you invest at the present in such a bond if you would like to receive per...

A: A series of unending equal cash flow is called perpetuity. The present value of perpetuity can be de...

Q: Shares of stock that have been issued by the corporation at their par or issued value of the shares,...

A: The capital of a corporation is contributed by many number of persons and same is accounted in books...

Q: The purchase of a used pickup truck for $9,000 is being considered. Fuel and maintenance $1,980 per ...

A: EUAC is the is equivalent uniform  annual cost which is necessary to cover all cost involved in that...

Q: mplement Method) . In Landers Superstore - Alabang having a march sales in all electronic gadgets th...

A: Multiple discounts are given to the customers for improving the sales of the company and these disco...

Q: On December 31, 2015, Martin Corp invested in Marlin’s 5-year, $200,000 bond with a 5% interest rate...

A: Market interest rate is the yield to maturity of the bond. It is the rate which the invetsors will g...

Q: Calculate the accounts receivable period, accounts payable period, inventory period, and cash conver...

A: Cash Conversion Cycle: It represents the time it takes for a business to transform its investments ...

Q: Varian wants to have $500,000 in an investment account six years from now. The account will pay 6.96...

A: Let "c "be monthly payments. Future value given = $ 500000 i = 6.96 ÷ 12 = 0.58% = 0.0058 Time = 6× ...

Q: Bond J has a coupon rate of 4.1 percent. Bond K has a coupon rate of 14.1 percent. Both bonds have n...

A: Fist we need to calculate bond price by using excel.  The formula is =-PV(RATE,NPER,PMT,FV)

Q: Exercise 4: The table below displays the prices for stock XYZ on the 15th of each month in the year ...

A: Spark line is a small chart that can be displayed in a cell and that provides a visual representatio...

Q: What was the invested on July 29, 2021 if it amounted to P130 300 on March 6, 2022 at 2%?. Use the B...

A: The banker's rule is based on a 360-day year, but you use the actual number of days in the term when...

Q: The one-year spot rate is 8 percent and the two-year spot rate is 10 percent. What is the price of ...

A: The Bond refers to debt instrument which represents a loan by a creditor to a bond issuer. which mea...

Q: Futures contracts have a high degree of standardization, while forward contracts are very individual...

A: Future contracts and forward contracts are derivative contracts that are used for hedging an underly...

Q: How much interest will be owed on a loan of P15,500 at the end of 4 years and 7months using 15 perce...

A: Loan amount (P) = P15500 Period (t) = 4 Years and 7 Months = 4+(7/12) = 4+0.583333333333333 = 4.5833...

Q: An individual has $45,000 invested in a stock with a beta of 0.5 and another $30,000 invested in a s...

A: Portfolio beta = (beta of the 1st stock * its weight in the portfolio) + (beta of the 2nd stock * it...

Q: How long will it take for your deposit to be P20, 000 if the account pays 12% annually?

A: Future Value: It represents the future worth of an investment cash flow and is computed by multiply...

Q: At age 28 you invest P 25,000 into a mutual fund. If the fund averages a 7% annual return, your inve...

A: Given, the amount invested is P25,000. Annual return is 7% Present age is 28.  

Q: Paul and Donna Kelsch are planning a Mediterranean cruise in 6 years and will need $6,500 for the tr...

A: Calculation of the periodic sinking fund payment: Given information:  Period (NPER): 6 years  The am...

Q: Mariel owes P30,000 in 5 months with interest at 7% and another P14000 is due in 11 months with inte...

A: Data given: Mariel owes P30,000 in 5 months  and  P14000 is due in 11 months.   New tenure = 9 month...

Q: k is $66.2/share. Its price is expected to be $69.8/share at ected return rate of the stock in this ...

A: The total return earned by holding an asset or a portfolio of assets for a specific period of time, ...

Q: Anita opens a savings account. At the start of cach month she deposits SX into the savings account. ...

A: Interest rate (r) = 4.2% per annum = 0.35 % per month Money deposited at the start of the month = X ...

Q: Given four proposals for funding a new project with a 100M limit on capital funding and the MARR is ...

A: Here,

Q: Find the future value for the ordinary annuity with the given payment and interest rate. PMT = $2,00...

A: PMT = $2000 r = 1.1% per annum = 0.09167% per month n = 6 years = 72 months

Q: Question 6 In terms of APR, which of the following loans would cost you the most to borrow? Principa...

A: Loan is a value which is borrowed from external sources like banks and this amount is repaid in fixe...

Q: For 14 years, Janet saved $1,050 at the beginning of every month in a fund that earned 4.25% compoun...

A:

Q: Question 3 Critically analyse the THREE main characteristics of FinTech and provide ONE example for ...

A: Fintech refers to a wide spectrum of software that is used to provide financial services. This inclu...

Q: Determine the interest payment for the following three bonds. (Assum $1,000 par value.) (Round your ...

A: Each bond there are coupon to be paid semi annually or annually depending on the interest rate preva...

Q: A owns a promissory note, due in 2 years hence, whose maturity value is 7,500 php. If the rate of in...

A: Period =  2 Years Bimonthly period = 2*6 = 12 Interest rate = 11.5% Bimonthly interest rate = 1.9166...

Q: eBook Problem Walk-Through A stock's returns have the following distribution: PIT Probability of thi...

A: When we are given the return under various market scenario along with probability of that market pos...

Classification Of Risk

Risk means when there could be a possibility that the returns expected from a particular project or investment may or may not match the investor's expectations. In other words, the uncertainty of an income arising from a source that would either be lower than expected or result in losses in risk exposure of the project. The higher the risk involved, the higher is the return expected by the investor as the investor is exposed to a high level of risk. There are various methods by which different types of risk can be assessed and avoided or mitigated.