elow are events, for each event, identify the type of risk the event entails, classify your identified risk as either systematic or unsystematic risk; Economic distress Mismanagement Technological causes Working capital problems Fraudulent management.

Q: Find the amount due at the end of three years, if the proceeds is Php10,000 and the discount rate is…

A: Future value of a present amount With present value (PV), periodic interest rate (r) and period (n),…

Q: Please help me with my homework. Thanks!   Please make an amortization schedule using the format I…

A: An amortization schedule with a minimum of 12 periods with a loan amount of P11000 and an interest…

Q: The following table gives the prices of bonds Bond Principal ($) Time to Maturity (yrs) Annual…

A: Solution: a) The zero rate for a maturity of six months, expressed with continuous compounding is…

Q: On December 31, 2020, SSNIT and SIC (non-life) entered into a six year swap arrangement with first…

A: Notional Principal = $50 million SIC interest Rate = 5% SSNIT interest Rate = LIBOR +1.25% LIBOR =…

Q: e at the The net revenue at the end of year 2 is $4,000. The net revenue at the end of year 3 is…

A: Annual level revenue is that revenue which is equivalent to total revenue considering the time and…

Q: I have one question, I was instructed that the answer is 17.39 years and while it's a very small…

A: Here, Bond type = zero coupon bond Market Price (PV) = $318.46 Face Value of bond (FV) = $1,000…

Q: Assume you deposit $700 every three months at a 6 percent annual rate, compounded quarterly. How…

A: Information Provided: Quarterly deposit = $700 Interest rate (APR) = 6% compounded quarterly Period…

Q: the periodic deposit. b. How much of the financial goal comes from deposits and how much com…

A: Future value of annuity includes the amount being deposited and also the amount of interest…

Q: Question 5 How many days are there between November 24, 2015 to March 28, 2016? 124 days 115 days…

A: Solution: Number of days between two dates can be computed by summation of monthly dates between the…

Q: Kawesha Corporation has a premium bond making semiannual payments. The bond pays a 9 percent coupon,…

A: Bonds The financial security, which is the loan that a company obtains from its investors is known…

Q: You are considering a stock investment in one of two firms (AllDebt, Inc., and AllEquity, Inc.),…

A: Return on Asset = This ratio indicates that how a company manage its asset to generate revenue for…

Q: What is the present value of the annuity that is payable quarterly for 4 years at 10% compounded…

A: PV of an ordinary annuity can be determined with the formula below: PV = PMT1 - (1+r)-nrWhere PMT =…

Q: Based on the calculated payback period, NPV, and IRR for each project: If these projects are…

A: 1) If  projects are independent, then all projects are recommended for investing only if a) Net…

Q: A bond pays semi-annual coupons of $50.  What is the Current Yield of a bond selling for $900 with a…

A: Information Provided: Par value = $1000 Price = $900 Semi-Annual Coupon payment = $50

Q: Boomerang Bungee Corp. is considering the following project. Determine the equal annual annuity for…

A: We need to find the equivalent annuity. Mathematically we need to find that cash inflow that will…

Q: On average, a firm sells $2,000,000 in merchandise a month. It keeps inventory equal to one-half of…

A: Solution:- Inventory Conversion Period (ICP) refers to the days or time it takes for a firm to…

Q: ABC Corporation plans to issue a 9%, 10-year, P5,000,000 face value bonds. It will incur P500,000 as…

A: Yield to maturity: Yield to maturity (YTM) is the total rate of return a bond will have achieved…

Q: 4) A project is predicted to have a return of -£16m in a recession, and the probability of a…

A: Expected Return - It is the return based on certain probability with possible outcome. It can be…

Q: A trader submits a market to sell 1,200 shares. The buy limit orders standing in the stock's order…

A: The market sell order will execute at the best available price or the highest available price. The…

Q: If a certain stock sells for 33.812 dollars on the NYSE, how much will it sell for, in dollars, on…

A: Price of a stock on on exchange in known. We have to find the price of the same stock on another…

Q: How do you maintain accurate and complete reporting of a budget? And how do you set up guardrails…

A: A budget is a financial plan that takes into account both income and costs. In other words, it is a…

Q: Your company is deciding whether to purchase a durable delivery vehicle or a short-term vehicle. The…

A: In the world of finance in general and in the domain of capital budgeting in particular equivalent…

Q: Adam purchases 1,200 shares of Beta Inc. at $22 per share [inclusive of commissions] and sells them…

A: A share has been purchased on leveraged and then sold. We have to find the return on the investment.

Q: You have been asked to forecast the additional funds needed (AFN) for Houston, Hargrove, &…

A: We have to find the AFN for the coming year under two different scenarios of payout ratio. We have…

Q: The beneficiary of a life insurance policy is to receive $2000 a year for 5 years, the first payment…

A: Value of the annuity at the time of the death is calculated as the present value of annuity due…

Q: 5. Panadera Bakeshop involved in livestock production having a loan of P250,000 from City Savings…

A: We have to find the maturity value of a loan subjected to compound interest.

Q: Find the compound amount if Php82,000 is monthly for 3 years. invested at 11% compounded…

A: We have to find the accumulated amount that results when an invested is compounded monthly over…

Q: You borrow $6,000 at a 10 percent annual rate to be repaid in 3 equal payments at the end of each of…

A: The annual installment is calculated with the help of following formula  Annual Installment = Amount…

Q: hat is the monthly investment amount required to generate a corpus of 10000000 in 8 years at return…

A: Future value of investment includes the amount being deposited and amount of interest accumulated…

Q: ces Both Bond Sam and Bond Dave have 8 percent coupons, make semiannual payments, and are priced at…

A: The bond is a debt instrument where a firm takes out a loan (bond price) in return for repayments of…

Q: The TLC Yogurt Company has decided to capitalize on the exercise fad and plans to open an exercise…

A: NPV is defined as the sum of the present values of all future cash inflows less the sum of the…

Q: What is financial repression and why does it exist?

A: Financial repression is the phrase used to describe policies used by governments to funnel money…

Q: Daniel Sawyer, the CEO of the Sawyer Group, is initiating planning for the company's operations next…

A: To achieve the growth there is need of capital and capital may come from internal sources and also…

Q: Muffin’s Masonry, Inc.’s, balance sheet lists net fixed assets as $26 million. The fixed assets…

A: The book value of assets is the value of assets in the Balance Sheet of the firm. The market value…

Q: You have a project which pays $1,000 in year 1 and cash flows decline 2% in each subsequent year.…

A: The formula to find the PV of a declining perpetuity is as follows: PV0 = CF1r-g Where CF1 = cash…

Q: Melissa Cult is thinking about buying some shares of EZLawn Equipment, at $44 15 per share She…

A: Note: Numbers are illegible, please check the numbers.   Data given: Purchase price=$44.15 per share…

Q: If you invest $10,000 per year at the end of each year for 3 years at an 5.5% rate of return, you…

A: Future Value of anuity = P * [ { (1 + r )n -1 } /r ] where, P =  periodic payment r = interest rate…

Q: Stock in Road Pave Zambia has a beta of .85. The market risk premium is 8 percent, and the Bank of…

A: Data given: Beta=0.85 Market risk premium =8 % Risk free rate = 5%  (Zambia treasury bills are…

Q: 1. Rose Meat shop obtains a loan of P150,000 from a lending company based on a simple interest rate…

A: Here, Loan amount = P150,000 Interest rate = 10.25% Time period = 2 years To Find: Part A. Interest…

Q: Both Bond Sam and Bond Dave have 7.1 percent coupons, make semiannual payments, and are priced at…

A: Percentage change in the price of a bond With initial price (X) and final price (Y), the percentage…

Q: tly paying 7 percent and the inflation rate is 3.2 percent. a. What is the approximate real rate of…

A: Information Provided: Inflation rate = 3.2% (Nominal rate) T-Bills rate = 7%

Q: Assume you deposit $2,000 every six months at 10 percent compounded semi-annually. How much will you…

A: To Find: Future Value

Q: Question 8 What is the future value of a lump sum of $4,351 invested for 7 years at 5.4 percent…

A: Initial investment (I) = $4,351 Interest rate (r) = 0.054 Period (n) = 7 Years Future value = ?…

Q: As a financial consultant, you are given the following information about two companies, one levered…

A: Concept. 1.Value of firm = net income ÷ cost of capital(WACC) 2. Value of firm  = value of debt +…

Q: Find the future value of the following ordinary annuity. periodic payment $95 payment interval 1…

A: Periodic payment (C) = $95 Term (n) = 5 Years Interest rate = 0.11 or 11% Future value = ?   Future…

Q: 3. ent Value: P = FV- or P = F(1+i) -n (1+r)" a) Find the present value of P8,000 due in four years…

A: Present Value refers to a concept that states the discounted value or say value at today's time of…

Q: Current exchange rate (Feb 15, 2018) is .0090 $/Yen. You speculate the exchange rate will be .0087…

A: The currency, which is going to be appreciated, should be short sold. In the given case, the current…

Q: Melissa's monthly loan payments for this loan when she graduates in 1 year?

A: Monthly loan payment is the payment of of loan amount over the period of loan. Monthly loan payment…

Q: Janlea Co. had total net earnings of $158,600 this past year and paid out 60 percent of those…

A: Required return = (D1/ Current market price)+Growth rate D1 = Dividend per share Dividend per share…

Q: d. Find the amount of 32,100 invested for 4 years and 3 months at 18% compounded: aa). monthly bb).…

A: Here, Invested amount (PV) = 32,100 Time period (NPER) = 4.25 years Interest rate (RATE) = 18%…

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.