What is tracking error?

Q: If you are worried that a panicked market might causethe price of one of your stocks to plunge, what...

A: In order to mitigate trading risk in the stock market and to secure the position held by the investo...

Q: The ABC corp. is expected to have the earnings before interest and taxes of $60,000 and the unlevere...

A: Value of Unlevered firm (Vu)Vu=EBIT1-TRu where T= Tax rate, Ru=Unlevered cost of capital Value of Le...

Q: A perpetual inventory system has these characteristics:

A: Perpetual inventory is a technique in which the sale and purchases of stocks are recorded with the u...

Q: Question 2: ABC Trucking has issued an 14-percent, 10-year bond that pays interest semiannually. If ...

A: Price of a bond is the current market value of a bond that an investor is willing to pay for purchas...

Q: What is the process of evaluating any business investment decision?

A: Investment decision refers to the decisions taken by either potential investors or existing investor...

Q: What is unlevered beta?

A: Unlevered Beta also known as asset beta is used to measure the market risk of the corporation withou...

Q: Determine the outstanding principal of the given mortgage. HINT [See Example 7.] (Assume monthly int...

A: Time has been valuable in all aspects but in terms of finance, time has a money value. The worth of ...

Q: 16. Calculate the future value of $8,000 earning 9% interest, compounded quarterly, for 11 years. Ro...

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

Q: Show how one can use the human capital framework to obtain an estimate of migration costs.

A: Knowledge has played a significant role in the development of society and mankind. Businesses run by...

Q: You are evaluating a growing perpetuity product from a large financial services firm. The product pr...

A: The cash flows that are started immediately after the investment and go on for an infinite time peri...

Q: If the present value of an ordinary, 6-year annuity is $6400 and interest rates are 2.5 percent, wha...

A: Given: Present value (PV)= $ 6400 Interest rate (r)= 2.5% Number of years (n) = 6

Q: The company will invest for a 2-year project. The first year, return of the investment is 240.000 US...

A: Formula for calculating PV: PV=FV×11+rn where FV=Future value r=interest rate n=number of years In...

Q: An SMSF can use borrowings to purchase assets. What is the arrangement that an SMSF must use for bor...

A:  Self Managed Super funds (SMSF) are the superannuation trusts. These trust provides benefits to the...

Q: Issue Price The following terms relate to independent bond issues: 500 bonds; $1,000 face value; 8%...

A: Present Value of Annuity: It refers to the amount of money needed in the present to fund future annu...

Q: Under an agreement with the Internet Service Providers (ISPs) Association, SBC Communications reduce...

A: Time value tells that money received by an individual today has more value than that of receiving th...

Q: A project to control flooding from rare, but sometimes heavy, rainfalls in the arid southwest will h...

A: B/C analysis refers to benefit-cost analysis. It considers the cost and benefit of given projects to...

Q: mr santos received two offers on a lot . He wants to sell mr. reyes has offered 50,000 pesos and 1 m...

A: Time value tells money received today is of more value than that of receiving exact value later on i...

Q: Calculate the net price factor and single equivalent discount. For convenience, round your answers t...

A:

Q: Thunder, Inc. has invested in the stock of several corporations and has $500,000 current year operat...

A: The taxable income would be considered after the deductions made. According to the relevant laws and...

Q: Number 4

A: Introduction: The value of savings at the end of a particular period is referred to as future value....

Q: Franklin Templeton has just invested $10,360 for his son (age one). This money will be used for his ...

A: Computation of rate of return is as follows:A=P1+r100nWhere,A=Future valueP=Present valuer=rate of i...

Q: Calculate the average daily balance (in $) for October for a revolving credit account with a previou...

A: Average daily balance is a method which computes the amount of interest on the basis of total amount...

Q: The contribution into an IRA for a particular year can be made any time from January 1 of that year ...

A: FV is the future worth of cash flows that have occurred in the past or present.

Q: Triple Play Innovators Corporation (TPIC) plans to offer IPTV (Internet Protocol TV) service to Nort...

A: Annual worth distributes present worth into equivalent uniform value over its useful life.

Q: What is the principal objection to the payback method?

A: The payback period refers to the amount of time it takes to recover the cost of an investment.

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume end...

A: Present value of annuity is the value of an asset at time 0. Present value helps in making decisions...

Q: $500,000 was invested in depreciable property to obtain before-tax annual revenues of $108,333.33 ea...

A: Capital expenditure differs from revenue expenditure in the sense that the benefits from such expend...

Q: A new employee plans to receive 760,000 TL individual retirement bonus when he retires. According to...

A: In case of ordinary annuity, the amount of periodic payment is being considered at the end of the pe...

Q: 12. speculative shares are shares... 1. With a low beta regardless of the nature of the economy 2. W...

A: Answers of questions- 12, 13 and 14 12. Speculative shares are high-risk, high-reward shares, and te...

Q: P. php1,000.00  R. 10% T. 3yrs I.? F.?

A: The future value of a cash flow is the future worth of a cash flow at a certain rate of interest and...

Q: Suppose S500 is invested at 4% compounded quarterly. (a) How long will it take the investament to ac...

A: The present value is that amount without which we cannot obtain the future value. The future value, ...

Q: If you solve for what fraction of yaur wealth (y) you shauld invest in the risky asset and you get t...

A: The question is based on the concept of portfolio creation and management. The portfolio is combinat...

Q: Mark Ventura has just purchased an annuity to begin payment two years from today. The annuity is for...

A: An Annuity is a continuous flow of systematic timely cash flows made or received for a stipulated ti...

Q: Will the death of the principal debtor convert, decrease or nullify the substantive right of the sol...

A: The surety’s obligation is not a direct and original obligation for the performance of his own act, ...

Q: A civil engineer who owns his own design/build/operate company purchased a small crane 3 years go at...

A: Replacement analysis: It is the decision related to the replacement or sale of an existing asset to ...

Q: When discounted to yield 9.2% compounded quarterly, a $6,600 four-year promissory note bearing inter...

A: It can be solved as follows:

Q: Jeff Rakhnovich has a simple discount note for $35,000 at an ordinary bank discount rate of 7%, for ...

A: Annual Percentage Rate (APR) is the rate at which total amount of interest is paid.

Q: Find the amount due at maturity for a 180 day note of $38,400 at 11.7% ordinary interest if a partia...

A: The total amount due is the amount that include the remaining principal balance as well as the inter...

Q: Several years ago, an individual won $27 million in the state lottery. To pay off the winner, the st...

A: The present value of the annuity is the current worth of a cash flow series at a certain rate of int...

Q: How is the total payment under a unit-price contract determined? When is such a contract likely to b...

A: Unit price contract is a common pricing contract which is based on each unit or task of the contract...

Q: The Stock of ABC Company is expected to grow at X% indefinitely. In this market, the Average return ...

A: The required rate of return would be providing the rate at which the current stock of the company wo...

Q: Suppose the continuously compounded interest rate this year is 9%, and in subsequent years, itwill b...

A: Future value refers to the amount of current investment after a certain time at a certain rate of in...

Q: Answer the following questions correctly and show your Solution.A to C. Juan Dela Cruz wants to inve...

A: Maturity value is the future value which will be received after a certain time period.

Q: Suppose you are in the market for a new car worth $18,000. You are offered a deal to make a $1,800 d...

A: Loan amortization schedule refers to the presentation of complete loan payments over the period of l...

Q: Calculate the value of a 2-year 3.5% annual pay bond given the interest rate below. What is the impl...

A: Firstly, calculate the Spot rate for Year 1 and 2: Spot rate for year 1 (S1)=Forward rate for Year 1...

Q: Biopharma-Australia can borrow fund in Australia with an interest rate of 11.47% to invest 1.85 mill...

A: Exchange rate  A rate at which 1 currency would be in exchange for another currency. It indicates th...

Q: An ordinary share currently pays a dividend of R2 for the year. Expected dividends growth is 20% for...

A: to find the ordinary share value we will first find the value of the share price at the end of three...

Q: The city council of Morristown is considering the purchase of one new fire truck. The options are Tr...

A: The B-C ratio helps us to understand the profitability of a project. It can be computed by dividing ...

Q: $500,000 is invested in equipment having a negligible salvage value regardless of the number of year...

A: Present value computes the existing value of future benefits by discounting future worth with a stat...

Q: 2/ a person owes 1000$ due in 1 year with interest rate 6%. two equal payments in 3 and 9 months, re...

A: Creditor is a person from whom the amount has been borrowed. Debtor is required to pay the amount wh...