What are the advantages and disadvantages of direct lending for the consumer? What can banks do to limit the disadvantages?

Q: Your insurance agent is trying to sell you an annuity that costs $40,000 today. By buying this…

A: An annuity is a payment series where the investor pays a lump sum amount in exchange for future…

Q: A project with a life of 5 years is expected to provide annual sales of $250,000 and costs of…

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Q: Expense Gas Insurance Oil Registration Depreciation Yearly cost or rate A. $1.11 per mile C. $4.91…

A: Cost per mile over the year = Total Cost / Total miles driven

Q: 2. An investor is setting up a fund which requires 20 years of contributions. The investor pays £100…

A: The future value of an ordinary annuity is the value of a series of equal periodic payments at a…

Q: You would like to provide $145,000 a year forever for your heirs. How much money must you deposit…

A: The perpetuity is a stream of cash flow which will be continuing forever and it will pay a certain…

Q: In all the binomial tree models reviewed during the module, the risk-neutral probability of a…

A: To determine the risk neutral probability we need to use the formula below: probability of a down…

Q: 30. You're looking at two bonds identical in every way except for their coupons and possibly their…

A: We have to comment on the price of a comparable bond that pays higher coupon rate, while rest of the…

Q: Translating the aspirations and circumstances of diverse households into appropriate investment…

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Q: Find the present value of the ordinary annuity. Payments of $430 made annually for 13 years at 6%…

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Q: 4-49. Consider the accompanying cash-flow diagram. (See Figure P4-49.) (4.7) a. If P = $1,000, A =…

A: An annuity is a series of periodic payments made at fixed intervals in exchange for a lump sum…

Q: You have a newborn son.  You want to plan for his future and there are 2 things that you would like…

A: STEP 1 The amount of money that would be required today to support a series of future annuity…

Q: You are interested in purchasing a new home for $200,000, but you need to save 20% of the price to…

A: Data given: Price of new home=$200,000 Savings=20% of Price of new home APR=9% n=5 years   Required:…

Q: The dividend for PQR Inc., is currently $2.63 per share. It is expected to grow at 20 percent next…

A: The dividend growth model is one of the methods employed to derive any stock's current worth. As per…

Q: (a) What is the market value and duration of the coupon bond investment in this portfolio? (b) What…

A: DEAR, which stands for Dollar Economic Capital at Risk, is a measure of the potential loss in a…

Q: What returned you are and if you pay 24,170 $ for a stream of $4000 payments lasting 10 years

A: An annuity is a financial product that provides a series of regular payments over a specified period…

Q: Company AAA and company BBB operate in the smartphone sector, and have the following information:…

A: Select financial and capital market related information have been provided on two peers. We need to…

Q: An investment will pay you $4000 each year for the next 8 years. The investment yields 6% APR,…

A: Step 1 Investors and financial advisers value the future value because it helps them determine how…

Q: XMT Corp. expects to receive AED 8 million per year for 8 years and AED 12 million per year for the…

A: We need to use present value of annuity formula to calculate present value of cash flows. PV…

Q: Your company purchases a new building for $500,000. The upkeep and maintenance of the building ends…

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Q: Filter Corporation has a project available with the following cash flows: Cash Flow -$ 13,700 6,600…

A: The Internal Rate of Return (IRR) is a financial metric used to measure the performance of an…

Q: Suppose that you opened a margin account (margin requirement = 60%) with your brokerage firm.…

A: STEP 1 The gain or loss of an investment over a given time period, represented as a percentage of…

Q: Suppose that Nevada Co., a US-based MNC, makes regular, monthly purchases of materials from a German…

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Q: You make a series of quarterly deposits every quarter starting at the end Quarter 1 and ending at…

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Q: Krista bomowed $21,039. The loan is to be repaid by three equal payments due in 66, 187, and 260…

A: Loan: It represents the amount the lender lends to the borrower and charges the interest rate on…

Q: what sum of money due on july 1 2020 is equivalent to 24000 due january 1 2011 if j2=7% for 2011,…

A:

Q: 4-60. Maintenance expenses for a bridge on the Ohio River are estimated to be $20,000 per year for…

A:

Q: You take out a 30-year mortgage, at a nominal annual rate of X%, with monthly compounding. Each…

A: Nominal Interest Rate: It represents the rate of interest that does not take into consideration the…

Q: Your company has a project available with the following cash flows: Year Cash Flow 0 1 2 3 30,400…

A:

Q: Analyze the basis for the prohibition of riba in Islam and explain briefly the TWO (2) types of riba…

A: Riba is one of the most important concepts that shapes the Islamic law system. The concept of riba…

Q: The dividend for PQR Inc., is currently $1.72 per share. It is expected to grow at 20 percent next…

A: Dividend discounting model is a model for finding out the value of share on the basis of future…

Q: 9 Suppose you invested $500 in a local credit union and: ● f(t) gives the future value of the…

A: Future value refers to the future worth of an investment or future accumulated sum. The…

Q: Bennett Company has a potential new project that is expected to generate annual revenues of…

A: Operating cash flow = (Sales - Variable costs - Fixed costs) (1 - Tax rate) + Depreciation (Tax…

Q: A perpetuity includes: a.An annuity due b.Common stock c.Preferred stock d.All of the above.

A: Perpetuity is a type of regular payment at regular intervals which is likely to continue forever.…

Q: The directors of Pelta Co are considering a planned investment project costing $25m, payable at the…

A: "Since you have posted a question with multiple sub-parts, we will provide the solution only to the…

Q: The YTM on a bond is the interest rate you earn on your investment if interest rates don’t change.…

A: The expected return has been computed below: The formula used to compute is:

Q: solution.    10. Compound Interest  An investment of P3M earns interest of 9% compounded…

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Q: an borrows Php 5000 with the agreement to pay the principal and all accumulated simple interest at…

A: In simple interest there is no interest on interest and interest on principal loan amount only so it…

Q: Which of the alternatives do you think Barry should​ select? Why?

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Q: Can you make the answer of number 5 a well-explained or thoroughly explained?

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Q: Age John Mary 9.20% 10.20% 11.20% 45 12.20% 44 What is their household Savings Rate? Salary Savings…

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Q: A firm wishes to maintain an internal growth rate of 11 percent and a dividend payout ratio of 52…

A: The debt-to-equity ratio assesses the total amount of debt held by a business compared to the…

Q: Only typed answer  The modified duration of a bond portfolio worth $3,500,000 is 8.00 years. By…

A: The modified duration refers to the sensitivity that the prices of the bond portfolio experience…

Q: In a reverse repo transaction, a bank buys Treasury bonds whose market value is $9.8 million and…

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Q: Question 2 What is the present value of $25,000 to be received in 5 years if your discount rate is…

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Q: "Company B, is a private company that designs, manufactures and distributes certain consumer…

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Q: A company has a project available with the following cash flows: Year 0 1 2 3 4 19,660 11,000 If the…

A:

Q: You will receive cash flows of $23.42 next year from a perpetuity. The perpetuity is indexed to…

A: Present value in case of perpetuity The quantity of the regular cash flows is simply divided by the…

Q: Given the NYSE advancing/declining (Num) and volume (Vol) Advancing Declining Day Num Vol Num Vol 1…

A: Advance-Decline Volume (AD Volume) is a technical analysis indicator that compares the number of…

Q: Your bank account pays an interest rate of 6 percent, but this interest is compounded daily (use…

A: Interest rate on account = 6% (compounded daily) Amount A = P(1 + r/n)nt Where A = amount P =…

Credit card

A credit card is provided by financial institutions or banks, which permits a person to borrow money on a preapproved limit for purchases on a credit basis. The credit limit is decided by the institution and bank which issues a credit card depending on the person’s credit score and income. A cardholder can use the card for credit purchases, a balance transfer, cash advances.