Illustrate the flow of funds between primary investors and ultimate borrowers in a modern economy. Give examples of intermediary activity

Q: You buy a house for $340000, and take out a 30-year mortgage at 5.5% interest. For simplicity, assum...

A: Loan Amount = $340,000 Time Period = 30 Years Interest Rate = 5.5%

Q: 1. Over the past year, your friend Maura has been saving up for an epic road trip to travel across t...

A: Sound Financial Decisions are those decisions which are taken or which exhibits strength in the area...

Q: ABC Industries is considering a 3-year project that will cost $200 today followed by free cash flows...

A: Adjusted Present Value (APV) is the capital budgeting technique that provide Net Present Value of a ...

Q: 3 Outsourcing IT services has grown in popularity due to a variety of factors, according to you. Th...

A: Banking and financial sectors provide financial assistance to the companies or borrowers. It plays a...

Q: Exercise 1 Masipag has an investment opportunity costing P300,000 that is expected to yield the foll...

A: Here we are provided with an investment opportunity which has an initial cash outflow and then cash ...

Q: a(ii) What are differences between Financial Services Act (FSA) 2013 and Islamic Financial Services ...

A: A Finance Act is a piece of fiscal legislation passed by the different government to give effect to ...

Q: 6% effemive RM1000 is invested in a fund for 3 years at 6% simple interest rate for the first intere...

A: We have to calculate the  Interest earned in the second year and the rate for the second year is 6% ...

Q: investor provides an entrepreneurial firm with the capital that it needs to grow. over and above pro...

A: The investors provide capital to business but alone capital is not sufficient to make business succe...

Q: Rank the following from highest present value to lowest present value. Assume they all have the same...

A: Lets assume that the rate of interest is 10% Lump sum - $1000 Time – 10 yrs r- 10% Present Value  ...

Q: rate on these 10-year bonds is 4.9%, how much is the a) with annual compounding

A: Given information : Expected amount to be paid  $1,000.00 Time to be paid (years) 10 Interest...

Q: Bramble Company sells 8% bonds having a maturity value of $2,000,000 for $1,848,366. The bonds are d...

A: Bond Amortization is similar amortization of loan which is prepared to determine the actual interest...

Q: A family purchased a house with a 15 year mortgage at 7.375% compounded monthly. The monthly payment...

A: Mortgage are the loan which is taken by the individual to meet its financial requirements. The mortg...

Q: In 1983 the average tuition for one year at an Ivy League school was $11,800. Thirty years later, in...

A: Growth rate is used in time value of money which shows the increase in nominal value of an asset or ...

Q: Find the firm’s Cost of equity, given only the following information about the firm: the firm’s cost...

A: The cost which the firm has to bear for having equity funds in their capital structure is called cos...

Q: A certain investment earns P2,000 in 18 months at a rate of 8% simple interest. How much is the prin...

A: Simple interest is interest that is paid or calculated solely on the principal sum of money. It does...

Q: What is portfolio Management? Describe the steps involved in portfolio management?

A: Portfolio means a bunch of different assets or investments. To reduce the risk, investors invest the...

Q: What is the importance of Foreign Exchange Market?

A: Foreign exchange markets commonly known as Forex markets are mainly concerned with purchasing and se...

Q: A trader creates a bear spread by selling a six-month put option with a $25 strike price for $2.15 a...

A: Short Put - Sold a put with a $25 strike price for $2.15 Long Put - Bought a put with a $29 strike p...

Q: Ashely Corporation has 80 million outstanding equity shares and the following projected financial in...

A: Cost of capital (r) = 13% Tax rate (T) = 25% PE ratio in year 4 = 20 Shares outstanding (n) = 80 mil...

Q: A corporate bond has a $10,000 face value, five-year maturity, and an 8% annual coupon rate. If inte...

A: Price of bond is sum of the present value of coupon payment and present value of par value.

Q: Discuss three of four purposes for leveraged loan proceeds listed in the "primer" document. Why woul...

A: A commercial loan given by a group of lenders is known as a leveraged loan. One or more commercial o...

Q: You are evaluating the expected performance of two stocks, Alibaba and Bank of China. You gathered t...

A: Expected Rate of Return: It is the return on investment that an investor is  anticipated  to receive...

Q: A borrower has secured a 30 year, $131.000 loan at 8% with monthly payments. Fifteen years later, th...

A: Loan Amount = $131,000 Time period = 30 Years  Interest rate = 8%   

Q: Sunland's Wind Toys manufactures decorative kites, banners, and windsocks. During the month of Janua...

A: Contribution is the excess of sales over variable cost.

Q: xyz corporation has a lower and upper limit for its savings account at 40,000 and 70,000 respectivel...

A: The Miller-Orr Model: The Miller-Orr Model is widely used in the management of cash in an organizati...

Q: A loan of $1575 taken out on June 7 requires three payments. The first payment is due on July 7. The...

A: The focal date of the loan is 7th June. The first payment is due on 7th July, the second payment is ...

Q: To expand its business, the ABC factory would like to issue a bond with par value of P1,000, coupon ...

A: The value of the bond is calculated as present value of cash flows. 

Q: Find the periodic payment which will amount to a sum of $16000 if an interest rate 8% is compounded ...

A: Annuity means a series of finite number of payments which are the same in size and made in equal int...

Q: (a) Explain one reason why gross profit margin of Firm-B is lower than that of Firm-A. (b) Suggest o...

A: Gross profit margin = gross profit/sales = (sales - cost of goods sold)/sales Net profit margin = ne...

Q: How many months will it take you to pay off the balance?

A: APR (Annual Percentage Return): It refers to the rate of interest charged on the loan annually or th...

Q: In December 2018​, General Electric​ (GE) had a book value of equity of $51.2 ​billion, 8.6 billion ...

A: Debt and equity are main sources of finance for the company and they make the company’s capital stru...

Q: Which of the following in not a major credit bureau? O Standard and Poors. All of these are major cr...

A: Credit bureaus are the credit rating companies that compile the credit scores of individuals. The ma...

Q: If interest rates increase because of a previously unanticipated inflation rate risk?     long-liv...

A: Answer -  If interest rates increase because of a previously unanticipated inflation rate risk as a ...

Q: 2. Jim Johnson, the CEO of Acme Imports Company, is focused on his next growth market. After extens...

A: The Expected monetary value analysis (EMV) is an important concept in project risk management which ...

Q: Assume you are 18 years old and you were able to save php 50.00. Given what you’ve learned on portfo...

A: Portfolio diversification is the process of investing your money in different asset classes and secu...

Q: Bob Russell purchased a home theater system for $5200, paying $500 down. The balance was financed fo...

A: APR or Annual Percentage Rate is the quote of interest rate before taking compounding into effect. I...

Q: DURATUL HOLDINGS STATEMENT OF FINANCIAL POSITION AS OF 31 DECEMBER 2021 (RM) i Sales for 2021 was RM...

A: Retained earning is the earning which is not distributed as dividend and can be used for further exp...

Q: An investment has had returns of 15 percent, 10 percent, -16 percent, and 27 percent over the last f...

A: Year Return 1 15% 2 10% 3 -16% 4 27%

Q: It is the fractional part of the capital or sum invested that is paid for the loan or investment.  ...

A: 1. The rate of interest is some predecided percentage that is charged on the loan amount or provided...

Q: On January 1, 2020, ABC Corporation invested in P2,000,000 bonds of DEF Company that will mature on ...

A: We have invested today 2000000 on which we have received interest at 10% for the next three years. I...

Q: Briefly tell us how you approach problems from a quantitative and qualitative perspective. ( Financi...

A: As a financial management intern I have to look into aspects of budgeting (making different types of...

Q: A & Z has to raise RM3 million for its five-year budget. The company is considering the following fi...

A: Expected Return The expected return is the minimum required rate of return which an investor require...

Q: Q4.06. Calculating the Number of Periods At 6.25 percent interest, how long does it take to a) doubl...

A: Present Value:  The present value is the value of cash flow stream or the fixed lump sum amount at t...

Q: A man purchases a lot worth 5M if paid in cash. On installment basis, he paid P800,000 down payment,...

A: Data given: Lot worth = P 5M = P 5000000 Down payment = P800,000 Loan amount = P 5000000 - P 800,000...

Q: A regional municipality is studying a water supply plan for its tri-city and surrounding area to the...

A: Initial Cost = 25 Million Interest Rate = 6%  

Q: What are some benefits of holding FX reserves (recall the Asian financial crisis of 1997)? Are there...

A: FX reserves are assets kept by a country's central bank or monetary authority, and they are commonly...

Q: You want to invest in a project in Canada. The project has an initial cost of C$1.6 million and is e...

A: Net Present Value(NPV) is the difference between current value of inflows and outflows related to an...

Q: What kind of information is gathered from a valid and trusted source and can be depended upon to be ...

A: Accounting information is very useful information which is being collected for the purpose of report...

Q: If you have $5500 to invest now, and will need a total of $25,000 -- 10 years from now, determine ho...

A: Present Value  The present value is the value of cash flow stream or the fixed lump sum amount at ti...

Q: Suppose the real rate on your investment is 9.5 percent and the inflation rate is 2.6 percent. What ...

A: Real Rate:  It is the rate which the investor would receive by investing the money. The real rate of...