International Financial Management
14th Edition
ISBN: 9780357130698
Author: Madura
Publisher: Cengage
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In a bond portfolio, the following are the present values of all cash flows by annual period: Year PV Cash flows (millions) 1 14.3 2 13.2 3 15.3 4 10.5 5 18.4 What is the percentage contribution to duration of the year 3 cash flows? Enter answer in percents.
If the loan interest rate is 4 % mark-up on the 6 month treasury bill and the deposit interest rate is 1% mark-up on the 3 month treasury bill, the risk of interest rate like this is called
(a) Repricing risk
(b) yield -curve risk
(c) basis point risk
(d) default risk
If the loan interest rate is 4 % mark-up on the 6 month treasury bill and the deposit interest rate is 1% mark-up on the 3 month treasury bill, the risk of interest rate like this is called
Repricing risk
yield -curve risk
basis point risk
default risk
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- Find the APR (true annual interest rate), to the nearest half percent, for the following loan. Amount Financed Finance Charge # of monthly payments $1300 $104 24 The annual percentage rate is _________%arrow_forwardWhich of the following best shows the timeline for cash flows from a five-year bond with a face value of $2,000, a coupon rate of 5.5%, and semiannual payments?arrow_forwardEstimate the annual percent rate for the add on loan Using the given number of payments and annual interest-rate. Use the formula APR = 2nr/n+1 N= 48; R= 8% APR=???arrow_forward
- Using Table 11-1, calculate the compound amount and compound interest (in $) for the investment. (Round your answers to the nearest cent.) Principal TimePeriod (years) NominalRate (%) InterestCompounded CompoundAmount CompoundInterest $24,000 18 5 annually $ $arrow_forwardExplain the nature of the potential lending losses associated with each of the following: default risk, liquidity risk, and maturity risk. What would you pay for an annuity paying $3,000 per year for 12 years if the interest rate is 10%?arrow_forwardTo calculate the effective rate of return on an investment, the total compound interest earned in 1 year is divided by the _____.arrow_forward
- From the following cash flow diagram, find the value of C that will establisheconomic equivalence between the deposit series and the withdrawal series at an interest rate of 8% compounded annually.arrow_forwardTo figure out how much total interest that you earn when you reach your investment goal, you ____________. Select one: a. interest rate % * total payments - amount borrowed b. interest rate % * amount borrowed c. # payments * monthly payment - interest rate % * amount borrowed d. # of payments * monthly payment- amount borrowedarrow_forwardFrom the following cash flow diagram, find the value of C that will establish economic equivalence between the deposit series and the withdrawal series at an interest rate of 8% compounded annually.arrow_forward
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