, what is 95% VaR? Explain the pros and cons of using VaR.

Q: 7. Mark Hohman has decided that it is time to buy a new car. He has found his dream car for $25,502…

A: Mortgage amortization refers to a schedule which is prepared to shows the periodic loan payments,…

Q: Determining whether an amount is of a capital or a revenue nature forms part of the subjective test.…

A: Capital is the amount invested in the particular asset, while revenue is the amount earned on the…

Q: Consider the following Put Option: May 50 trading at $3.15/share May is the expiration  50 is the…

A: In case of Put option, Buyer will exercise the put option only if strike price is greater than stock…

Q: hy is it important to understand financial statem

A: Financial statement are representation of the performance of company and are show how is company…

Q: The amount by which the balance sheet does not balance at first is called _______. A. total B.…

A: When balance sheet doesn't balance at the first, it means there is some error or mistake which need…

Q: A man loan an amount of P 100,000_at a commercial bank at 10% compounded_annually. How much is his…

A: loans are to be paid by equal monthly payments and these payments carry the payment of interest and…

Q: A $1,000 par value 15-year bond with a 5.5 percent coupon rate recently sold for $1,079.18. The…

A: The YTM or the yield to maturity is the rate of return that an investor will earn if the bond is…

Q: Suppose the stock price is $20 today. In the next six months it will either fall by 50 percent or…

A: Let S denote the share price, r risk free rate, up-factor (u) = 1.50 and down factor (d) = 0.50…

Q: In a short squeeze.. O A. The short-seller is expected to earn a very positive return if s/he…

A: A short squeeze is an unusual phenomenon where a stock with multiple short sellers actually…

Q: Michael had to make a payment of $2,750 in 10 months and $2,300 in 20 months, to a raw material…

A: Payment in 10 months (P1) = $2750 Payment in 20 months (P2) = $2300 Let the settlement payment in 4…

Q: The city of Oak Ridge is evaluating three mutually exclusive landscaping plans for refurbishing a…

A: Data given:   Landscaping plan   A B C Initial planning cost $75000 $50000 $65000 Annual…

Q: Blue Bell stock is expected to return 23 percent in a boom, 16 percent in a normal economy, and lose…

A: Expected Return  (E(X)) = 0.23*0.05 + 0.16*0.90 - 0.32*0.05  = 0.0115 + 0.144 - 0.016 = 0.1395

Q: Depending on whether or not she gets the city to build a new stadium, the owner of a pro-basketball…

A: Assuming a call option with $180 million as the current price and the strike price, 5% as risk-free…

Q: In a public corporation, the agency conflict is: O the exploitation of the workers by the owners O…

A: Solution:- Agency conflict is the conflict between the principal and its agent.

Q: a. Inflation is 3%, which is 1% above the target; output growth is 4%, which is 1% above potential.…

A: According to Taylor’s equation, the proper fund's rate is to be calculated by r=p+0.5y+0.5(p-2)+2…

Q: Cambria Bank is holding $9 million in reserves, $12 million in government bonds and $10 million in…

A: Given:Reserves= $9 million Government bonds= $12 million Mortgage Loans= $10 million Deposits= $30…

Q: Comprehensive Ratio Analysis Data for Lozano Chip Company and its industry averages follow.…

A: Ratio Analysis is the financial analysis technique to analyse the company's financial position. It…

Q: the first due at the end of x years. Find x. a. 4 b. 7 c. 3 d. 8

A: Time value of money (TVM) refers to the method used to measure the amount of money at different…

Q: While the bare minimum may be last year's balance sheet, it is unlikely that you can produce useful…

A: : Financial forecasting is a type of process in which a business will perform activities for the…

Q: Please help with multiple choice questions.

A: Payback period refers to the time period within which a certain investment may be recovered. It is a…

Q: Stock price S=$21 Exercise price K= $20 Interest rate r = 0.08 Maturity T= 180 days = 0.5…

A: Options are versatile financial products. These contracts involve buyers and sellers, who pay a…

Q: A firm must decide between two silicon layer chip designs from Intel. Their effective income tax…

A: With reference to capital budgeting, while evaluating the mutually exclusive project, the net…

Q: If debt is used as the plug, this will create a circular reference; the debt level will depend on…

A: If debt is used as a plug, the debt is financed through issue of fresh debt. This would imply that…

Q: Therefore, the annual coupon payment is

A: Annual coupon payment = Face value * Annual coupon rate

Q: What is the market price of a redeemable (at par) bond, with a maturity date in 4 years’ time, and a…

A: Price of the bond is the sum of  all cashflows during the life of bond discounted at yield to…

Q: Explain the concept of 'beta within the frame work of CAPM model. Discuss the relevance of the…

A: CAPM is the Capital asset pricing model. The formula is: Expected return=Risk free rate+Beta×Market…

Q: What will $110,000 grow to be in 9 years if it invested today at 11%

A: Future value = PV*(1+r)n Where PV - Present value = $110,000 r - Interest rate = 11% n - Period = 9…

Q: What equal payments at the beginning of each 3 months for 5 years will discharge a loan of P18,000…

A: Loan amount = P18,000 Quarterly interest rate (r) = 0.03 (i.e. 0.12 / 4) Quarterly period (n) = 20…

Q: Assume  you have secured a loan of $10,000 from a bank  which will be paid in one year. The bank has…

A: Interest payable = Opening Balance * Monthly interest rate

Q: what is the maximum amount that the company should pay for the machine today such that the chouices…

A: Loan amortization refers to a schedule which is prepared to shows the periodic loan payments, amount…

Q: 1. What are the techniques used in evaluating investments? List them and explain

A: Capital budgeting is a process used by the companies to use its limited resources to get the best…

Q: Why is it important to keep those business receipt/record

A: Any business in any form or in any industry that is doing commerce or trade will have receipts and…

Q: Shania must submit paperwork to participate in her company's flexible medical benefits program. She…

A: Status quo bias can be defined as the state where an individual does not want to change anything…

Q: Iggy Company is considering three capital expenditure projects. Relevant data for the projects are…

A: Here, Depreciation Method is Straight Line Method.

Q: A. What is the monthly payment? Alejandra has a payment of $ a month. B. How much interest will be…

A: Mortgage amortization refers to a schedule which is prepared to shows the periodic loan payments,…

Q: 1. How much would the effective cost of the borrowing to ABC after the swap? 2. Assuming that the…

A: Interest rate swaps can be defined as forward contracts where fixed interest rate is exchanged for…

Q: Find how much money needs to be deposited now into an account to obtain $40,000 in 5 years if the…

A: Future value (FV) = $40,000 Period (n) = 5 Years Interest rate (r) = 7%

Q: If money is invested at an interest rate of 5.7 percent per year, find the annual percent yield…

A: Effective yield or the APY takes into consideration the number of times compounding is done in a…

Q: On November 1, 20x2, Irvin Corp. sold goods to John Company for 130,000 rupee. Payment is due on…

A: Here, Forward Rate of November contract is 0.85 Spot Rate at Match is 0.87 Amount is 130,000

Q: Refer to the table below to answer one question. Interest Rate Option March 2020 Cash 0.00% Checking…

A: Money can be held or can be invested in different investment vehicles or in different types of…

Q: You have invested P100,000 in a mutual fund that promises to pay 8% each year. You will keep this…

A: Future value of the present amount With present value (PV), interest rate (i) and period (n), the…

Q: A copyright is issued when a firm uses identifying words, names or symbols on its product to…

A: Copyright can be defined as the protection of work created by the artist which is original,…

Q: EPS is computed by dividing net income by the average number of shares outstanding.  True  False

A: Earnings per share(EPS) refers to an indicator or a financial ratio that shows how much a company is…

Q: Nt yet aeed The 5-year borrowing costs of two MNCS are summarized in the following table. A swap…

A: Given,   Here, the (US) MNC having an absolute merit in the $ and (EU) MNC is having a comparitive…

Q: If you short-sell a stock and it pays a dividend while your short sale is open, then O A. You are…

A: Solution:- Short selling means selling a stock in the market by borrowing it from someone else.

Q: BG Company has P8,000,000 in current assets, P3,500,000 of which are considered permanent current…

A: The minimum assets required to maintain the company's operations are known as permanent current…

Q: Suppose you buy a $40,000 car and you 'put down' $5,000 and finance the rest for 72 months at 3.75%…

A: Solution:- When a loan is taken, the amount can be repaid as a lump sum payment or in instalments.…

Q: 5.5. A corporation sold a piece of equipment during the current tax year for $78,600. The accounting…

A: Gain or loss on sale of an asset can be calculated by comparing the book value of the asset with the…

Q: Which of the following is a middle manager?

A: Branch manager is a middle manager which helps in sales acheive goals and overall position.

Q: Find the future value of a simple interest loan of $2,500 at 8.8% interest for 10 months Give your…

A: Loan amount = $2,500 Interest rate = 0.088 Loan period = 10 months Future value of simple interest…