• Contrast the activities of securities firms from other financial institutions. How do these financial institutions differ from hedge funds?

Q: A $10,000 note with 6% interest payable quarterly is purchased for $8,000. The note matures in 5 yea...

A: Par value = $10,000 Coupon rate = 6% Quarterly coupon amount = 10000*0.06/4 = $150 Period = 5 Years ...

Q: Stock Y has a beta of 1.2 and an expected return of 11.5 percent. Stock Z has a beta of .80 and an e...

A: The risk-free rate of return is the theoretical return on a risk-free investment. Over a given perio...

Q: A new electric saw for cutting small pieces of lumber in a furniture manufacturing plant  has a cost...

A: Modified Accelerated cost recovery system (MACRS) Modified Accelerated cost recovery system (MACRS) ...

Q: Project A costs $67,775, its expected net cash inflows are $10,000 per year for 10 years, and its WA...

A: The modified internal rate or return(MIRR) is used to calculate equated worth of generated cash flow...

Q: An investment has the following annual cash flow 1st year-Php50,000 2nd year- Php 65,000 3rd year- P...

A: NPV is the difference between present value all cash inflows and initial investment. NPV =pv of all ...

Q: The maintenance cost of a new equipment is projected to start at the end of the 2nd year at an amoun...

A: Cost in year n = Cn C2 = P 8000 C6 = P 10000 Uniform increase in cost = (10000 - 8000) / (6 - 2) = P...

Q: 6. An investment of P3,000,000.00 earns interest of 9% compounded continuously. the effective rate o...

A: Effective interest ratee is the interest considering the impact of the compounding on the interest a...

Q: Describe three circumstances under which a person who has ceased to be a liquidator is released from...

A: Liquidation of assets can be voluntary or compulsory. Voluntary liquidation may be conducted to rais...

Q: ABC Corp has an average inventory period (production process time + time before sale) of 36 days. Ac...

A: An operating cycle is the amount of time it takes for a firm from getting the production started to ...

Q: pplegate Industries is planning to expand its production facility in a few years. New plant onstruct...

A: Number of Years = 3.5 Periods per year = 4 (interest rate compounded quarterly) Nominal rate= 8% Int...

Q: What is meant by a perfect hedge? Does a perfect hedge always lead to a better outcome than an imper...

A: A perfect hedge is a position taken by an investor that eliminates the risk of an existing position ...

Q: Compute the cost of equity for this project      2. Compute the relevant cost of debt for this proje...

A: Cost of Equity: It represents the cost of raising equity capital from equity investors. The equity ...

Q: In the Wall Bricks, Inc.’s balance sheet lists net fixed asset as $12 million. The fixed assets coul...

A: SOLUTION : Book Value of Net Fixed Assets as per Balance sheet = $12 million - Book Value of Current...

Q: P= P1,000 r= 5% t=5 years m=2 What is the present value of an annuity due?

A: Payment (P) = P 1000 r = 5%, m = 2, hence semiannual compounding Effective interest rate (r) = (1 + ...

Q: Assume that a bond will make payments every six months as shown on the following timeline (using six...

A: Assuming that the bond has been issued and is being redeemed at par itself. Coupon rate is the rate ...

Q: Which one of the following statements is correct with respect to policy retention? Group of answer ...

A: Insurance is a contract represented by a policy that an individual or group receives financial prote...

Q: Consider the following four debt securities, which are identical in every characteristic except as n...

A: Interest rate or YTM of a bond Yield to maturity (YTM) of a bond is the total anticipated return on ...

Q: antha lives under an imputation tax system. Her income tax rate is 35%, which applies to all of her ...

A: The companies pay dividend out of the net income and this is paid to shareholders but shareholder ha...

Q: distributed cash dividends of $0.60 and capital gains of $1.40 per share. If the net asset value of ...

A: Return on Investment: It is a measure of performance applied to evaluate the profitability of an in...

Q: Consider a one-year discount bond that has a present value of P1,500. If the rate of discount is 4 p...

A: Present value (PV) = P1500 Discount rate (r) = 4% Period (n) = 1 Year

Q: who are still dependent. He received a $150,000 lump-sum retirement bonus and will receive $2,800 pe...

A: Prices increase each year by the rate of inflation and may grow to double from existing levels over ...

Q: 4) An n-year loan involves payments of $800 at the end of each month. The interest rate is 12% conve...

A: Here, Monthly Payment is $800 Interest Rate is 12% Compounding Period is Monthly i.e. 12 Interest on...

Q: Which of the following statements concerning the Efficient Market Hypothesis is correct? Select one...

A: Share prices, according to the efficient market hypothesis represents all the information available ...

Q: elow is the information about three RM1000 par value bonds that pay coupons every six months. The re...

A: Value of a bond  = sum of present value of all its future cash flows. Future cash flows from a bond ...

Q: This is an amortized loan, because its payments contain: O Only the principal that must be repaid Bo...

A: An amortized loan is that loan in which scheduled periodic payments are made. The payments are made ...

Q: Mr. Hernandez wants to provide a series of 18 yearly allowance for his 1 yr old daughter starting at...

A: Year Annual payment 1 to 7 50000 8 to 12 85000 13 to 18 200000 Interest rate = 17%  

Q: Sara owns a small business and plans on retiring in 5 years. Given his past experiences, she expects...

A: To find if it is a good investment, the calculation for the required return should be done first. Af...

Q: Hastings Entertainment has a beta of 0.65. If the market return is expected to be 11 percent and the...

A: Required rate of return of stock can be found from the CAPM model using risk free rate and market ri...

Q: Find the monthly house payments nessary to amortize the following loan. Find total payments and tota...

A: Loan amount (PV) = 198000 Interest rate = 6.94% Monthly interest rate (i) = 6.94%/12 = 0.57833333333...

Q: You bought 100 shares of Zen stocks initially selling at Php 50 with an initial margin on your purch...

A: Given: Particulars   Number of shares 100 Selling price 50 Initial margin 25% Interest ra...

Q: A study is conducted among senior citizen 60 - 95 years of age staying in home for the aged. We are ...

A:     Mortality Rate Conditional Probability   A1 60-69 0.057 0.33 0.01881 A2 70-79 0.018 0.48 0.0...

Q: If the corporate tax rate was 25 percent, what were the firm's income taxes for each year? Round you...

A: Tax refers to the amount charged by the government on individuals, partnership firms, HUF’s or any c...

Q: (Working with the income​ statement)  If the Marifield Steel Fabrication Company earned $463,000 in...

A: Solution : Earning Per share ( EPS) means that amount which was Calculated as follows. Net Income / ...

Q: r = discount rate C = net cash flow (the profit) at time t (The initial cost of ac- quiring a custom...

A: The net present value of a series of cashflow can be defined as the sum of present values of the cas...

Q: Perkins, Inc., is considering an investment of $383,000 in an asset with an economic life of 5 years...

A: Cash Flows: Cash flows eliminate the impact of non-cash charges and give the true picture of the cas...

Q: Neverland Company, a retailer, plans to sell 15,000 units of Product X during the month of August. I...

A: Sales = 15000 units Opening stock = 2500 units Closing units = 2000 units

Q: FedEx Corp. stock ended the previous year at $103.39 per share. It paid a $0.35 per share dividend l...

A: Since the dollar return is over all income and capital return in a given period. Dollar Return= (End...

Q: You have just retired with savings of $4 million. If you expect to live for 34 years and to earn 13%...

A: This is the case of an annuity due. This is because money is being spend at the start of each year.

Q: A car is available for Rs. 402200 cash or Rs. 150000 cash down payment and 3 equal half yearly insta...

A: Present Value of Ordinary Annuity refers to a concept that determines the value of cash flows at pre...

Q: On January 2, 2021, Santos Company invested in a 4-year, 10% bond with face value of P6,000,000 in w...

A: The question has 2 parts: 1. The investment designated as an investment at amortized cost on the dat...

Q: What is the Macaulay duration of a bond with a coupon of 5.8 percent, eleven years to maturity, and ...

A: The Macaulay duration of a bond is the weighted average duration of the bond where we take the weigh...

Q: Dan bought 200 shares of a stock at P140 per share. A year later, he sold the stocks at P145.50 a sh...

A: Buying price = P 140  Selling price = P 145.50 Dividend = P 2.25

Q: Evan and Emmanuel want to buy a $250,000 home. They plan to pay 15% as a down payment, and take out ...

A: Cost of House is $250,000 Down payment is 15% Term of loan is 30 years Interest rate is 4.9% To Find...

Q: buy a new house soon he’s considering two mortgage options. 15 year mortgage with a APR 2.75% or a 3...

A: The mortgages are paid by the monthly payment that carry the payment of interest and payment of the ...

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

A: Initial Investment is $100million Net Working Capital is $20 million out of $100million Cost of mach...

Q: January February March 15,000 Sales in units.. 20,000 18,000 Production in units.. 18,000 19,000 16,...

A: This pertains to production budget in finance. We often make different types of budget in finance an...

Q: SHOW SOLUTION 3.The maintenance cost of a new equipment is projected to start at the end of the 2nd...

A: The annual equivalent maintenance cost is the equal amount of cost incurred on equipment during the ...

Q: The payback method helps firms establish and identify a maximum acceptable payback period that helps...

A: Payback period is the number of years required to recover the initial investment in the project. Ans...

Q: You win a structured settlement in a lawsuit. Assume that the settlement pays $30,000 per year for ...

A: Periodic Payment = $30,000 Time Period = 25 Years Discount Rate = 7%

Q: 6. Jake and Archie are looking for places to live. Jake decides to rent a house for $1400 Archie buy...

A: Interest is compounded semiannually, which means it is compounded once every six months. As a result...