explain the unique characteristics of the asset class, their associated risks and potential returns. For each asset class, you should use one or two examples to support your explanation. Asset Class           Characteristics Risk Potential Returns Example Cash Products  Fixed Income  Equities  Currencies

Q: You purchase a TIP note with an original principal amount of $1,.000,000 and a 9 percent annual…

A: Original Principal Amount = $1,000,000 Annual coupon Rate = 9% Inflation over the first six months =…

Q: A project with a 3-year life has a payback period of 2.51 years and an NPV of -$183 using a discount…

A: IRR is the internal rate of return. It is that rate at which NPV has to be nil.

Q: A market where investors trade previously issued securities without the issuing companies'…

A: Stock market is a market were purchasing and selling of the stocks will be done.

Q: of the recession phase. (Check all that apply) Choose the characteristics Unemployment begins to…

A: Characteristics of Recession include: Unemployment begins to rise Businesses lower production of…

Q: The following is an extraction from an amortisation schedule for a filling station. The loan will be…

A: A loan amortization schedule is used to show the components of each payment and how much of the…

Q: Puji International Freight Company (PIFC) wishes to determine the required return on Asset J, which…

A: Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: What is the relationship between principle-agency theory, separation of ownership, and controversy?

A: Corporation there are shareholders who are the owners of the company but they do not run the company…

Q: A. Complete the information below using Ordinary Simple Annuity. 1. R=P900 An = Sn = P11,504.14 t=…

A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only…

Q: Suppose that the new equipment has a cost basis of $12,000 and a salvage value of $3,0 of 6 years.…

A: The cash flow that is produced by the equipment consider the tax benefits of the depreciation so…

Q: The board of directors of SSS Inc., have declared a dividend of P18,000,000. The company has 40,000…

A: The dividend is the return to the shareholders by the company for the investment made. Shares are…

Q: 12 year $1000 bond pays 9% interest. The maturity on a comparable risk bond is 6%. Current price of…

A: Solution:- Yield to maturity means the rate of return earned by the bond holder, if he holds the…

Q: Explain Stakeholder Theory. Discuss the roles play by the board of directors in the application of…

A: Stakeholders are people that are directly related to the firm. These include shareholders,…

Q: Wildcat Pizza, Inc. would like to open a new restaurant in Boston. The initial investment to…

A: Given, The initial investment is $420,000 Additional working capital is $50,000

Q: Monthly payments for 5 years after you graduate, annual interest rate of 6% compounded monthly.…

A: A stream of equal cash flows (CF) paid or received periodically is termed as annuity. Ordinary…

Q: 28. What is scarcity? O Balancing unlimited wants with lim OBalancing trade between different:…

A: Scarcity is the gap between scarce resources and unlimited wants that are never-ending but to…

Q: what is the present worth of this investment?

A: Time value of money (TVM) refers to the method or technique which is used to measure the amount of…

Q: A retrofitted space-heating system is being considered for a small office building. The system can…

A: MARR = 15% Cash Flows: Year Cash Flow  0 -110,000.00 1 30,070.00 2 30,070.00 3 30,070.00…

Q: Suppose a bank enters a repurchase agreement in which it agrees to sell Treasury securities to a…

A: Buy back price = $10,000,090 Purchase price = $9,999,827 Day to maturity = 5

Q: A washer- dryer combination listed at $ 1136 has a net price of $ 760. What is the rate of discount?

A: Discount is the amount which deducts from the listed price of the commodity or any good.  Rate of…

Q: How does a financial manager monitor and evaluate a firm’s financing?

A: Financial management refers to the art of managing the money of the firm in order to meet its…

Q: Your company is considering a project which will require the purchase of $635,000 in new equipment.…

A: Given: Particulars Amount Cost of asset $635,000 End value 25% Sales $224,000 Working…

Q: A company considering water flooding plan for one its small oil field, the chances of success is as…

A: Here, To Find: Investment should be made or not =?

Q: A 20-year annual coupon bond with a face value of $100 and a coupon rate of 10% was originally sold…

A: Bonds are the debt securities which are issued by the corporates or the government to arrange the…

Q: 2. Suppose that three stocks (A, B, and C) and two common systematic risk factors (1 and 2) have the…

A: Expected Return on stock :The expected return is the profit or loss that an investor expects or…

Q: L>Moving to another question will save this po Question 7 You purchase a TIP note with an original…

A: TIPS are treasury inflation protected securities. The principal invested in the TIPS increases with…

Q: Number of years to provide a given return In the information given in following case, determine the…

A: Solution:- When an equal amount is invested each period at end of period, it is called ordinary…

Q: ANNUITY. If P10,000 is deposited each year for 9 years, how much annuity can a person get…

A: This problem can be solved in light of present and future value of annuity. The present value of…

Q: Can you fill in the tables and answer the questions?

A: A loan is an agreement where the parties exchange an amount for periodic payments in the future that…

Q: QUESTION 1 For the below Cash Flow, find the total PW value using 10% interest rate years cost $…

A: As you have posted multiple questions, we will answer the first question for you. To get answers for…

Q: During a software project Earned Value. Analysis is performed and gives the following results EV:…

A: An earned value analysis of the project is performed by the managers so that the managers can…

Q: what is the benefit cost ratio?

A: net present value revenue = 1.5 cost revenue - cost = NPV 1.5cost -cost = 250000 cost = 500000…

Q: Tokyo Corporation must pay one of its suppliers P765,000. The bank requires a 15 percent…

A: Banks and financial organizations often lend money to various businesses, clients, and investors in…

Q: 1. Consider a real return bond with a face value of $15,000 and a coupon yield of 5.2%. What is the…

A: Coupon payment after one year will be face value of bond multiply with adjusted coupon rate after…

Q: A loan is repayable by a decreasing annuity payable annually in arrears for 20 years. The repayment…

A: Loan: when money is given to another party in exchange for repayment of the (principal amount +…

Q: ​(Related to Checkpoint​ 6.5)  ​(Present value of a growing​ perpetuity)  What is the present value…

A: Year one cash flow = $2500 Growth rate = 0.02 Discount rate = 0.13 Discount rate = 0.11 Present…

Q: ​(Present value of a growing​ perpetuity)  As a result of winning the Gates Energy Innovation​…

A: A perpetual annuity is a policy that you pay for the rest of your life. Eternity in finance refers…

Q: # 1 Interest Amount Present Value $16,775.00 Interest Rate Time 0.5% per month 6 months Future Value

A: Future Value: The future value is the amount that will be received at the end of a certain period.…

Q: CASE STUDY: Tanya wants to open her own pet grooming business after she graduates from high school.…

A: Future value of saving includes the deposit being made but also compound interest being accumulated…

Q: Use the FV formula for an ordinary annuity to calculate the future value of investing $507 a month…

A: Future Value of Ordinary Annuity refers to the concept which dictates the compounded value of a sum…

Q: Your company has a 12.00% required rate of return and will not pay any dividends for the next seven…

A: Required rate of  return (r) = 12.00% Dividend at the start of year-8 (D) = $3.00 Growth rate (g) =…

Q: The 2018 balance sheet of Speith's Golf Shop, Inc., showed long-term debt of $6.2 million, and the…

A: Step 1:- Calculate cash flow to creditors * Cash flow to creditors represents the payment made by a…

Q: Pablo Company is considering buying a machine that will yield income of $3,300 and net cash flow of…

A: Net present value is one of the most common methods used in capital budgeting to analyze the…

Q: Your company is considering a project which will require the purchase of $635,000 in new equipment.…

A: NPV takes into account the time value of money and can be used to evaluate similar investment…

Q: If the interest received was $4790, how much was loaned at 11%?

A: Interest: It refers to the monetary charge on the credit or loan amount and is expressed as APR…

Q: essica purchased an electric guitar from Music World. The purc 2,700. She took advantage of the…

A: Purchasing is done by loans that are paid by monthly payments and these payments carry the payment…

Q: What is CAPM and how it used in portfolio management?

A: Risk and return are the two main parts of any investment and before investing in any security or…

Q: Find i (the rate per period) and n (the number of periods) for the following annuity.

A: Rate per period: It is the rate applied for a certain period and is estimated by dividing the…

Q: The disposition effect:   a. Is the tendency of stock investors to sell their winning stocks and…

A: In finance disposition effect is related to behavioral finance. Disposition effect refers to the…

Q: Stock A has expected return of 15% and standard deviation (s.d.) 20%. Stock B has expected return…

A: Expected Return on investment : The expected return is the amount of profit or loss an investor can…

Q: What is your yield to maturity on the bond given the market price of the bonds?

A: Yield To Maturity: It is the total expected rate of return for the bondholder given all the coupon…

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.