The following information showed: State of the Economy                       Probability of the States           % of Returns Strong Economic Growth                            20%                                     13% Moderate Economic Growth                       55%                                     10% Economic Recession                                    25%                                       5% What is the standard deviation? a.2.76% b.4.68% c.5.52% d.8.00%

Q: 7. Determine the exact simple interest and future worth of P1,500,000 invested for the period from M...

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

Q: Both Bond Bill and Bond Ted have 10.6 percent coupons, make semiannual payments, and are priced at p...

A: We can calculate the current price of the Bond bill and Bond ted then will find the change in the pr...

Q: An asphalt road requires no upkeep until the end of 2 years when P60, 000 will be needed for repairs...

A: Equivalent uniform annual cost is the annual cost of repairing, maintaining an asset over its useful...

Q: Credit Risk. A bond's credit rating provides a guide to its risk. Suppose that long-term bonds rated...

A: Credit Rating of Bond is the rating by which default risk of bond can be analysed. Higher the credit...

Q: What is the present value of $5,000 paid at the end of each of the next 89 years if the interest rat...

A:

Q: projects payback? Year Cash flows 1 3 $300 -$500 $150 $200

A: Payback period is the time taken to recover the cost of the investment. The payback period does not ...

Q: For a 20-year deposit, what annual rate payable semiannually will produce the same effective rate as...

A: Annual rate (r) = 8.50% e = 2.7182818284590452353602874713527 Effective annual rate = er-1          ...

Q: Mackenzie Company has a price of $31 and will issue a dividend of $2.00 next year. It has a beta of ...

A: Equity refers to that portion of the capital that is funded by the owners of the company. The cost o...

Q: Find the optimal risky portfolio if you could only use these two funds, ABC and 123,  assume the two...

A: Here,   ABC 123 Expected return 0.12 0.15 Standard Deviation 0.2 0.3 Correlation Coeffici...

Q: John Love sold a put option on Canadian dellarn for S0.02 per unit. The strike prce was S063, and th...

A: Put option provides the buyer to receive the downside difference and seller to receive the upside di...

Q: The present worth of P 40,000 in the first year and amounts of decreasing by P 3000 per year through...

A: First year amount = P 40,000 Annual decrease = P 3000 Interest rate = 14% Period = 5 Years  

Q: Why there is a difference between the interest rate and the APR

A: Interest rates and APR are two phrases that are sometimes used interchangeably to refer to comparabl...

Q: what are the meaning of Revenue Enhancement and Cost Saving ? and I need examples for each.

A: Revenue enhancement is the enhancement or increase in the revenues which also leads to an increase i...

Q: A dam project of the Philippine Government was estimated to cost Php 340000000 during its constructi...

A: First cost (F) = Php 340,000,000 Annual cost (A) = Php 2,000,000 Repairing cost every 10 years (R) =...

Q: Determine the present value of payments of $100 at the end of each month for 20 years. Use a discoun...

A: Monthly payment (P) = $100 Interest rate = 6% Monthly interest rate (r) = 6%/12 = 0.50% Period = 20 ...

Q: The Charleston Company is a relatively small, privately owned firm. Last year the company had after-...

A: The price-earnings ratio is the ratio of the market price of a stock to the earnings per share. It i...

Q: Equity: 120,000 shares at $1 each. Share premium: $22,000 The company decides to issue 1:3 shares....

A: Share Premium- This is the amount which is over and excess of nominal value. If Say for example if n...

Q: An ordinary annuity where the first cash flow of the series is not at the end of the first period an...

A: Annuity: It is a series of payments that is paid  at equal intervals.  

Q: What is a smart beta strategy? How does this strategy work

A: In the world of finance and investing there exists a concept called smart beta strategy. 

Q: Find out debtors turnover ratio from the following information for one year ended 31st March 2014. A...

A: Debtors turnover ratio is the measure of finding out the efficiency of the company in collecting the...

Q: Question: As data is attached to the image. You are required to comment/analyze on Artistic Denim Mi...

A: Leverage: The leverage of a company indicates how much of the asset is financed through debt. Debt i...

Q: alue of perpetuity amo

A: Given information : Perpetuity amount 18000 Nominal rate  5% Since the question have not men...

Q: Aimee invested part of Php35,000 in a stock paying 9% interest for 2 years and the balance in a stoc...

A:

Q: For insurance companies risk management is critical to the success and viability of their business. ...

A: An underwriter's risk of loss is known as underwriting risk. Underwriting risk in insurance can resu...

Q: What three real-world complications keep purchasing power parity from being a complete explanation o...

A: Purchasing power parity-It states that exchange rates between two currencies are in equilibrium,i.e....

Q: A geometric gradient that increases at ? = 6% per year for 15 years is shown in the accompanying  di...

A: It is given that:P = $500 Growth g- 6% Interest r- 12% Time n – 15 yrs

Q: purchase a home for $280,000. She will use a down payment of 18% and finance the remaining portion a...

A: Monthly payment of loan carry the interest payment and payment for principal payment and the interes...

Q: What is the NPV of building this device, if the interest to borrow the funds is 15%?  (Round to near...

A: Net Present Value: It helps in analyzing the project's profitability and is computed from the diffe...

Q: An investment of $600,000 is made in equipment that qualifies as 3-year equipment for MACRS-GDS depr...

A: To calculate the Net Present Value, the rate to be used will be the nominal rate, which will be calc...

Q: Steady Company's stock has a beta of 0.17. If the risk-free rate is 6.1% and the market risk premium...

A: Stock beta (B) = 0.17 Risk free rate (RF) = 6.1% Market risk premium (MR) = 7.1%

Q: Dewyco has preferred stock trading at $53 per share. The next preferred dividend of $5 is due in one...

A: Next dividend (D1) = $5 Current price of stock (P0) = $53

Q: Bart is a college student who has never invested his funds. He has saved ​$540 and has decided to in...

A: An initial investment accumulates interest. The future value is the accumulated value of the initial...

Q: "What is the effect of state laws forcing individuals to purchase auto liability insurance?"

A: Liability insurance protects against bodily harm and/or property damage claims. If the insured party...

Q: Elijah now has $500. How much would he have after 7 years if he leaves it invested at 5.1% with annu...

A: We will apply the formula of future value so as to find the amount of money that Elijah will have af...

Q: Assume that the risk-free rate is 5.5% and the market risk premium is 4.5%. What is the required...

A: Risk free rate = 5.5% Market risk premium = 4.5% Beta = 0.90

Q: Clark borrows P 600,000 at 15% compounded annually agreeing to repay the loan in 15 equal payments. ...

A: Loan amount (PV) = P600,000 Interest rate (r) = 15% Number of payments (n) = 15

Q: Lilly's Tax has an EPS of $2.40, a book value per share of $22.84, and a market/book ratio of 27X. W...

A: The equity multiplier is a risk indicator that measures how much of a company's assets are funded by...

Q: 10. Find the present worth of an annual installment of P5000 for 10 years, if the money is worth 15%...

A: Annual installment (A) = P5000 Interest rate = 15% Annual effective rate (i) = [1+(0.15/12)]12-1    ...

Q: Consider the previous question with the following details: A company is considering a project that w...

A: In the project evaluation using the discounted payback period, we should compute the present value o...

Q: Assume that in 2018, a copper penny struck at the Philadelphia mint in 1796 was sold for $495,000.  ...

A: Yield to maturity can be calculated by following function in excel =RATE (nper, pmt, pv, [fv], [typ...

Q: Prepare an amortization schedule for a three-year loan of $93,000. The interest rate is 8 percent pe...

A: Loan amount (PV) = $93000 Interest rate (r) = 8% Number of annual payments (n) = 3

Q: Jennifer intent to calculate the future value of the following cash flow at the end of 5 years, assu...

A: We will apply the required formula to calculate the future value of the cash flow using interest rat...

Q: A woman bought an expensive bag costing P 60,000 payable in 12 quarterly payments each installment p...

A: Given: Particulars Amount Loan           P60,000 Periods 12 Interest rate 24%

Q: C: 9% Year Cash flows -$1,000 $500 $500 $500

A: Year Cash flow 0 -1000 1 500 2 500 3 500   WACC = 9%

Q: Elijah and Laila are saving for their daughter Tanisha's college education. Tanisha just turned 10 (...

A: Accumulated value at t=0 is $17,000 Interest rate is 7%  Additional investment in year (t=1,2,3,4) i...

Q: 5.7. Projects A through E are being considered by an investor. They all are ten-year projects and th...

A: Capital rationing is a concept that refers to analyzing the present value of inflows and outflows to...

Q: BDJ Co. wants to issue new 22-year bonds for some much-needed expansion projects. The company curren...

A: Solution:- We know, when a bond trades at par, coupon rate of bond = Yield to maturity of bond There...

Q: our company has two divisions: One division sells software and the other diVIsion sells computers th...

A: WACC for the computer sales division = WACC of Dell (as Dell Computer is very similar to your comput...

Q: You are employed by an investment bank to estimate the value of a coupon-paying bond with the follow...

A: Solution:- Market value of the bond = Present value of coupon amounts receivable from bond at yield ...

Q: Determine the exact simple interest and future worth of P1,500,000 invested for the period from Marc...

A:

Exchange Rate Risk

It is the possibility that the value of a currency will fluctuate in the future. In the wake of globalization, business establishments have increasingly ventured into international markets. The volume of international trade has prospered excellently in the near past and is expected to be more affluent in the future. The use of exchange-traded derivative financial instruments has been multi-folded to provide for the requirements of various MNCs and offshore potential investors. Most banks and financial institutions have helped integrate the global economies. Our Government has introduced some bold and extreme measures to fulfil the purpose behind the fiscal, industrial, and monetary policies. The enactment of GST is a huge step towards streamlining the taxation system of the country. Owing to Covid-19, this aspect of corporate risk management has become critical.