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232891 | A well-known financial writer argues that he can earn 246 percent per year buying wine by the case. Specifically, he assumes that he will consume one $9 bottle of fine Bordeaux per week for the next 12 weeks. He can either pay $9 per week or buy a case of 12 bottles today. If he buys the case, he receives a 12 percent ... | 245.7% | Percentage | Finance | University | 167,073 |
1395523 | Five equal annual contributions are to be made to a fund, the first deposit on December 31, 2007. Determine the equal contributions that, if invested at 10% compounded annually, will produce a fund of $30,000 on December 31, 2012. | $4,467.20 | Float | Finance | University | 194,495 |
354836 | How many years will it take $2 million to grow to $3.80 million with an annual interest rate of 8%?
(Round the final answer to 2 decimal places.) | 8.34 years | Float | Finance | Senior High School | 63,101 |
1679540 | Given the following information, leverage will add how much value to the unlevered firm per dollar of debt? Corporate tax rate: 34% Personal tax rate on income from bonds: 10% Personal tax rate on income from stocks:50%
$-0.050
$-0.188
$0.367
$0.633
None of these | D | Multiple Choice | Finance | University | 104,625 |
1141830 | Assume an end-of-year cash flow of $250 and a 10 percent discount rate. What is the present value of a 10-year annuity? | $1,536.14 | Float | Finance | University | 219,527 |
245644 | You have $136,000 to invest in a portfolio containing Stock X, Stock Y, and a risk-free asset. You must invest all of your money. Your goal is to create a portfolio that has an expected return of 16 percent and that has only 86 percent of the risk of the overall market. If X has an expected return of 42 percent and a b... | $92,432.90 | Float | Finance | University | 5,731 |
367900 | What is the internal rate of return for the following investment: $10,000 invested at the beginning of the first year (now); $6,000 invested at the end of the first year; and $30,000 withdrawn at the end of the fourth year?
a. 18.82%
b. 49.60%
c. 4.62%
d. 20.63% | 18.82% | Percentage | Finance | University | 7,314 |
1209672 | You plan to invest in bonds that pay 5.0%, compounded annually. If you invest $10,000 today, how many years will it take for your investment to grow to $30,000?
a. 15.27 years
b. 18.85 years
c. 16.97 years
d. 13.74 years | b | Multiple Choice | Finance | Senior High School | 1,571 |
1205489 | A DI has two assets: 50% in one month Treasury bills and 50% in real estate loans. If the DI must liquidate its T-bills today, it receives $98 per $100 of face value; if it can wait to liquidate them on maturity (in one month's time), it will receive $100 per $100 of face value. If the DI has to liquidate its real esta... | 0.979 | Float | Finance | University | 63,010 |
1242334 | You want to travel to Europe to visit relatives when you graduate from AUT three years from now. The trip is expected to cost a total of $10000 at that time. Your parents have deposited $5000 for you in a certificate of deposit(CD) paying 6 percent interest annually, maturing three years from now. Aunt Hilda has agreed... | $3,396.19 | Float | Finance | University | 115,171 |
417209 | Marcela's bottles is an outdoor outfitter specializing in merchandise. Marcela has agreed to sell 10,000 water bottles in exchange for a $15,000 payment today and an additional $50,000 one year from today. The water bottles cost $3 each to manufacture. Assuming an annual interest rate of 4%, what is the net benefit tod... | $63,076.92 | Float | Finance | University | 52,768 |
1991668 | Suppose that you have children that are young, pay for their college expenses, and finally start saving for retirement at age 50. How much do you have to save per month, with a steady return of 6% compounded monthly, to accumulate $250,000 by age 65? | $859.642 | Float | Finance | Senior High School | 42,153 |
2056570 | The market value balance sheet for Bobaflex Manufacturing is shown here. The company has declared a 15 percent stock dividend. The stock goes ex dividend tomorrow (the chronology for a stock dividend is similar to that for a cash dividend.
Market Value Balance Sheet
Cash $83,000
Fixed assets $670,000
Total $753,000... | 29.52 | Float | Finance | University | 148,753 |
308770 | How much would you be willing to pay today for an annuity that promises to pay $6,968 per year for 16 years, beginning exactly one year from today. Your relevant interest rate is 7 percent. | $65,823.9088 | Float | Finance | University | 103,525 |
2029603 | Brooks Enterprises has never paid a dividend. Free Cash flow is projected to be $80,000 and $100,000 for the next 2 years, respectively; after the second year, FCF is expected to grow at a constant rate of 8%. The company's weighted average cost of capital is 12%. Calculate the value of Brooks' operations? | $2,303,571.43 | Float | Finance | University | 133,132 |
1875421 | You deposit $5,000 into a retirement account at the end of the next 15 years, earning 8% interest, what is the future value of your retirement after 15 years? | $135,750 | Integer | Finance | Senior High School | 28,118 |
2019287 | Moby dick corporation has sales of {eq}\$4,216,040
{/eq}; income tax of {eq}\$588,149
{/eq}; the selling, general and administrative expenses of {eq}\$274,448
{/eq}; depreciation of {eq}\$325,726
{/eq}; cost of goods sold of {eq}\$2,590,660
{/eq}; and interest expense of {eq}\$113,946
{/eq}. Calculate the a... | $762,783 | Float | Finance | University | 200,372 |
1049549 | You decide to purchase a building for $30,000 by paying $5,000 down and assuming a mortgage of $25,000. The bank offers you a 15-year mortgage requiring annual end-of-year payments of $3,188 each. The bank also requires you to pay a 3 percent loan origination fee, which will reduce the effective amount the bank lends t... | 10% | Percentage | Finance | University | 102,975 |
254892 | Beverly Frost bought a home for $190,000 with a down payment of $19,000 at 7% for 25 years. Since then the rate has risen to 9%. How much more would her monthly payment be if she bought the house at 9%? | $225.44 | Float | Finance | Senior High School | 220,277 |
954530 | Flower valley company bonds have a 14.80% coupon rate interest is paid semiannually. The bonds have a par value of $1000 and will mature 22 years from now. Compute the value of flower valley company bonds if investors required rate of return is 10.57%. | 1358.68 | Float | Finance | University | 159,275 |
1465302 | What is the Stated Rate (APR) for the following:
Effective Rate (EAR) = 12.9%
Number of Time Compounded = Infinite | 12.13% | Percentage | Finance | University | 210,788 |
1727842 | Consider the following two mutually exclusive projects:
Year
Cash Flow (A)
Cash Flow (B)
0
-$10,110
-$10,110
1
$5,200
$4,300
2
$3,373
$3,543
3
$4,473
$5,343
What is the crossover rate for these two projects?
... | e | Multiple Choice | Finance | University | 158,859 |
1420021 | Project K costs $50,000. Its expected cash inflows are $14,000 per year for 8 years, and its WACC is 12%. What is the project's NPV? | $19,547 | Float | Finance | University | 1,102 |
1693374 | You purchased a zero-coupon bond one year ago for $282.33. The market interest rate is now 7 percent. If the bond had 19 years to maturity when you originally purchased it, what was your total return for the past year? | 4.79% | Percentage | Finance | University | 90,020 |
1331590 | You own a small manufacturing plant that currently generates revenues of $2 million per year. Next year, based upon a decision on a long-term government contract, your revenues will either increase by 20% or decrease by 25%, with equal probability and stay at that level as long as you operate the plant. Other costs run... | 2.27 million | Float | Finance | University | 106,150 |
1300846 | What is the EAR if a bank charges you an APR of 7.65 percent, compounded quarterly?
a. 7.91 percent
b. 8.38 percent
c. 8.02 percent
d. 7.87 percent
e. 8.11 percent | d | Multiple Choice | Finance | Senior High School | 723 |
1918348 | An organization purchased a four-year $10,000 bond paying a 7% annual coupon and interest rates (for present value purposes are currently at 4%. This works out to a present value of the payment streams of $673.08 + $647.19 + $622.30 + $9,146.40 = $11,088.97, which is the market price of the bond. What is the duration o... | 3.65 | Float | Finance | University | 14,780 |
380674 | Consider a 3-month European put option on a non-dividend-paying stock, where the stock price is $60, the strike price is $60, and the risk-free rate is 3% per annum. The stock price will either move up by 10% or down by 5%, every month. Price the put with binomial trees.
a) $2.10
b) $2.52
c) $2.94
d) $3.37 | b | Multiple Choice | Finance | University | 220,423 |
1400091 | Assume that 1000 shares of Cackle Cola are purchased at $23.15 and sold 7 days later at $24.60. Assume a 1% commission on each transaction and a continuous risk-free of 4% per year. What is the gain (or loss)?
a. $955
b. $960
c. $965
d. $970
e. $975 | a | Multiple Choice | Finance | Senior High School | 202,740 |
526952 | A project will produce cash inflows of $1,650 a year for four years. The project initially costs $10,700 to get started. In year five, the project will be closed and as a result, should produce a cash inflow of $8,600. What is the net present value of this project if the required rate of return is 12.75%? | -$1,046.81 | Float | Finance | University | 135,127 |
15038 | A small business owner visits his bank to ask for a loan. The owner states that he can repay a loan at $2,300 per month for the next three years and then $1,300 per month for two years after that. If the bank is charging customers 10.50 percent APR, how much would it be willing to lend the business owner? | $91,249.14 | Float | Finance | University | 72,265 |
76552 | Here are data on two companies. The T-bill rate is 4.8% and the market risk premium is 9.2%.
Company $1 discount store Everything $5
Forecast Return 16 % 15%
Standard deviation of returns 23% 25%
Beta 1.4 1
A. What would be the fair return for each company, according to the capital asset pricing model (CAPM)?
C... | The fair return for $1 discount store is 17.68%. The fair return for Everything $5 is 14.00%. | Percentage | Finance | University | 183,279 |
962039 | You are given the following information for Watson Power Co. Assume the company's tax rate is 40 percent.
Debt: 8,000 coupon bonds outstanding, yielding 6.45 percent and paying a 6.9 percent coupon, $1,000 par value, 20 years to maturity, selling for 105 percent of par; the bonds make semiannual payments.
Common stoc... | 11.94% | Percentage | Finance | University | 203,780 |
1781360 | Benge Automotive issued a corporate bond with a face value of $1,000, with a 10% annual coupon rate paid semiannually. The bond matures in 12 years and sells at a price of $1,080. What is the component cost of debt for use in the WACC calculation?
A 8.28%
B 8.65%
C 8.90%
D 9.31%
E 10.78% | C | Multiple Choice | Finance | University | 193,688 |
2060575 | Calculate the present value of a single cash inflow of $12,000 in 5 years, discounted at a 12% rate of return. | $6,809.12 | Float | Finance | University | 23,785 |
1039594 | Newcomer Mills is a relatively new firm that will retain all of its earnings for the next four years. Four years from now, the firm expects to pay its first dividend of $0.25 a share. After that, it intends to increase the dividend by 4% annually. What is the value of this stock today at a discount rate of 12%?
A $1.5... | D | Multiple Choice | Finance | University | 186,901 |
1030092 | Several years ago the Jakob Company sold a $1,000 par value, a noncallable bond that now has 20 years to maturity and a 7.00% annual coupon that is paid semiannually. The bond currently sells for $925 and the company s tax rate is 40%. What is the component cost of debt for use in the WACC calculation? | 4.5972% | Percentage | Finance | University | 141,193 |
1965340 | Jones Corp is evaluating a project that has the following annual free cash flows:
Period : Freecash flow
0 : -150
1 : 100
2 : 150
If the project's discount rate is 12%, then what is the NPV of the project? | $58.86 | Float | Finance | University | 128,889 |
1250731 | Options on D Corporation with 14 months until expiration and a strike price of $85.
The risk free rate for 14 months is 4.5% (annualized with continuous compounding). The firm is not expected to pay any dividends over the next 14 months, and the current stock price is $92.78. The price of the call option is $10.33 and... | 4.12 | Float | Finance | University | 226,539 |
420537 | You just won the TVM Lottery. You will receive $1 million today plus another 10 annual payments that increase by $510,000 per year. Thus, in one year, you receive $1.51 million. In two years you get $2.02 million, and so on. If the appropriate interest rate is 5.8 percent, what is the present value of your winnings? | $27,515,750 | Float | Finance | University | 117,893 |
738860 | A project has an initial cost of $50,600, expected net cash inflows of $13,000 per year for 6 years, and a cost of capital of 12%.
What is the project's NPV? | $2,848.33 | Float | Finance | University | 59,381 |
1266275 | A machine costs $70,000, and generates revenue of $20,000 per year. However, O&M costs are $3,000 per year. The machine lasts 7 years and your MARR is 8% annual rate compounded annually.
What is the Present Worth (or Net Present Value)? | $18,508.29 | Float | Finance | University | 225,637 |
2049382 | You want to build a two asset portfolio including SPDRs and T-Bills that has an expected return of 10.06%. A SPDR is a Standard and Poor's Depositary Receipt. A SPDR is an exchange traded fund (ETF) that is designed to generate the same return as the S&P 500 index.
What is the portfolio weight on the SPDRs?
Assume th... | 1.26 or 126% | Float | Finance | University | 6,864 |
1083930 | Your company doesn't face any taxes and has $750 million in assets, currently financed entirely with equity. Equity is worth $50.00 per share, and book value of equity is equal to market value of equity. Also, let's assume that the firm's expected values for EBIT depend upon which state of the economy occurs this year,... | $3.76 | Float | Finance | University | 56,574 |
1715338 | GEO Inc. has paid annual dividends of $.41, $.47, and $.52 a share over the past three years, respectively. The company now predicts that it will maintain a constant dividend since its business has leveled off and sales are expected to remain relatively flat. Given the lack of future growth, you will only buy this stoc... | $3.25 | Float | Finance | University | 168,190 |
1019447 | True or False? A mezz loan is generally collateralized by equity. | True | Boolean | Finance | University | 85,734 |
1235228 | Water Wings Sports is considering an investment that costs $300,000 and is expected to generate cash flows of $90,000 per year during its 5-year life. If WWS's required rate of return is 15%, what is this investment's net present value? | 1694 | Integer | Finance | University | 79,308 |
1057386 | You invest a single amount of $10,000 for 5 years at 10 percent. At the end of 5 years you take the proceeds and invest them for 12 years at 15 percent. How much will you have after 17 years? | $ 86,166.31 | Float | Finance | Senior High School | 218,871 |
118789 | When a syndicated loan is oversubscribed, the borrower will have to make with a lower amount.
a. TRUE
b. FALSE | b | Boolean | Finance | University | 104,720 |
1410986 | Home Depot is looking to expand operations at all of their stores for an initial investment of $800. This investment will be depreciated on a straight line basis over the project's 8-year life. The expansion is expected to produce annual cash inflows of $620 in each year over the life of the project, while also produci... | 257.67 | Float | Finance | University | 121,652 |
1861905 | An asset had annual returns of 14 percent, 9 percent, -12 percent, 3 percent, and 32 percent for the past five years. What is the standard deviation of these returns? | 16.05% | Percentage | Finance | University | 71,740 |
102807 | Flatte Restaurant is considering the purchase of a $9,100 souffle maker. The souffle maker has an economic life of five years and will be fully depreciated by the straight-line method. The machine will produce 1,550 souffles per year, with each costing $2.20 to make and priced at $4.80. Assume that the discount rate is... | 2639.31 | Float | Finance | University | 99,112 |
398139 | A stock just paid a dividend of D0 = $1.50. The required rate of return is rs = 8.0%, and the constant growth rate is g = 4.0%.
What is the current stock price? | $39 | Float | Finance | University | 29,358 |
1792754 | Bobbi Proctor does not want to "gamble" on Social Security taking care of her in her old age. Hence she wants to begin to plan now for retirement. She has enlisted the services of Hackney Financial Planning to assist her in meeting her goals. Proctor has determined that she would like to have a retirement annuity of $2... | 4675.761 | Float | Finance | University | 185,133 |
884771 | Rochelle Kotter wants to attend a university five years from now. She will need $88,000. Assume Rochelle's bank pays 6 percent interest compounded monthly. What must Rochelle deposit today to accumulate $88,000 in five years? | $65,240.75 | Float | Finance | University | 108,287 |
767634 | Your uncle developed a new video game franchise and left the rights to you. Under current copyright law, your intellectual property is protected for 95 years. You expect that the profits from the franchise will be $1 million in its first year and that this amount will grow at a rate of 5% per year during the life of th... | $24,283,186.60 | Float | Finance | University | 175,069 |
1287294 | Currently, you can have $11,289 in your investment account. You have decided to save an additional $600 a month for the next 5 years and then remodel your house. How much will you be able to spend on the remodeling project if you can earn an annual return of 8.8 percent? | $62,510 | Float | Finance | Senior High School | 85,537 |
242611 | What is the maximum period that an insurer would pay benefits in accordance with an Additional Monthly Benefit rider? | One year | Integer | Finance | Senior High School | 21,231 |
2039711 | Under the terms of his salary agreement, president Henry Walters has an option of receiving either an immediate bonus of $66,000, or a deferred bonus of $84,000 payable in 10 years. Ignoring tax considerations and assuming a relevant interest rate of 4%, which form of settlement should Walters accept? | $66,000 | Integer | Finance | University | 208,353 |
1704924 | What is the present value of a $100 per year perpetuity if the appropriate discount rate is 6 percent and the first payment begins in five years? | $1,320.16 | Float | Finance | University | 30,892 |
671293 | CF Biogenetics, Inc. plans to retain and reinvest all of their earnings for the next 12 years. Beginning in year 13, the firm will begin to pay a $25 per share dividend indefinitely. Given CFB is fairly risky the required return is 18%, what should the stock sell for today? | 19.06 | Float | Finance | University | 219,890 |
1282494 | Rachel purchased a $16,500 car three years ago using an 8 percent, 4-year loan. She has decided that she would sell the car now if she could get a price that would pay off the balance of her loan. What is the minimum price Rachel would need to receive for her car? | $4,612.56 | Float | Finance | Senior High School | 101,715 |
1893888 | A company currently pays a dividend of $3.20 per share ({eq}D_0
{/eq} = $3.20). It is estimated that the company's dividend will grow at a rate of 17% per year for the next 2 years and then at a constant rate of 7% thereafter. The company's stock has a beta of 1.3, the risk-free rate is 8.5%, and the market risk premi... | 67.36 | Float | Finance | University | 52,725 |
214996 | What ROR will an entrepreneur make over a 8 year project period if he invested $75,000 (time 0) to produce portable X-volt air compressors? His estimated costs are $20,000 per year with estimated revenue of $40,000 per year.
A. ROR= 14.9%
B. ROR=-100.0%
C. ROR= 20.8%
D. ROR= 79.2% | C | Multiple Choice | Finance | University | 164,298 |
1974404 | Project L costs $55,000, its expected cash inflows are $11,000 per year for 8 years, and its WACC is 9%.
What is the project's MIRR? | 10.39% | Percentage | Finance | University | 64,636 |
1935687 | Janicek Corp. is experiencing rapid growth. Dividends are expected to grow at 25 percent per year during the next three years, 15 percent over the following year, and then 6 percent per year indefinitely. The required return on this stock is 12 percent, and the stock currently sells for $94 per share. What is the proje... | 3.86 | Float | Finance | University | 161,723 |
193887 | Victoria Exports. A Canadian exporter, Victoria Exports, will be receiving six payments of 12,000 euros, ranging from now to 12 months in the future. Since the company keeps cash balances in both Canadian dollars and U.S. dollars, it can choose which currency to exchange the euros for at the end of the various periods.... | U.S. dollars | String | Finance | University | 209,662 |
45992 | Your project has cash flows of -$1,000 in year 0, +$3,550 in year 1, -$4,185 in year 2, and -$1,638 in year 3. What is its IRR? | 255.01% | Percentage | Finance | University | 179,008 |
414883 | A company can acquire a $700,000 machine now that will benefit the company over the next 5 years, with a net present value of $134,000 using a 10% hurdle rate. Based on this information, what is the annual cash operating savings expected to be produced by the machine? | $220,007.10 | Float | Finance | University | 123,547 |
1110091 | Given the following information for Lightning Power Co., find the WACC. Assume the company's tax rate is 35%.
Debt: 8,000 6.5% coupon bonds outstanding. $1,000 par value, 25 years to maturity, selling for 106% of par; the bonds make semiannual payments.
Common stock: 310,000 shares outstanding, selling for $57 per sh... | 9.08 | Float | Finance | University | 212,180 |
1035168 | Marsha Jones has bought a used Mercedes horse transporter for her Connecticut estate. It cost $51,000. The object is to save on horse transporter rentals. Marsha had been renting a transporter every other week for $216 per day plus $1.80 per mile. Most of the trips are 90 miles in total. Marsha usually gives the driver... | 19596.70 | Float | Finance | University | 145,680 |
897467 | Use the Black-Scholes model to find the price for a call option with the following inputs:
1) current stock price is $32
2) strike price is $35
3) time to expiration is 6 months
4) annualized risk-free rate is 3%
5) variance of stock return is 0.26.
Round your answer to the nearest cent. In your calculations, rou... | $3.61 | Float | Finance | University | 213,045 |
1411535 | A fast-growing firm recently paid a dividend of $0.35 per share. The dividend is expected to increase at a 20 percent rate for the next four years. Afterwards, a more stable 11 percent growth rate can be assumed. If a 12.5 percent discount rate is appropriate for this stock, what is its value? | 35.36 | Float | Finance | University | 175,858 |
982879 | A 5% semiannual $1,000 bond matures in 4 years. What is the yield to maturity if the price is $1,069? | 3.17% | Percentage | Finance | University | 161,056 |
830846 | An annuity is set up that will pay $900 per year for 12 years. What is the present value of this annuity given that the discount rate is 6%? | $7,545.46 | Float | Finance | University | 149,053 |
744308 | A new client wants your recommendation on available investment options. You prepare a client profile, which reveals that the investor is 66 years of age, has a low risk tolerance, and is in a low tax bracket. The investor's primary objectives are safety and income. Of the following, the most suitable choice would be A)... | C | Multiple Choice | Finance | University | 72,403 |
57842 | Although the Chen Company's milling machine is old, it is still in relatively good working order, and would last for another 5 years. It is inefficient, compared to modern standards, though, and so the company is considering replacing it. The new milling machine, at a cost of $1,150 delivered and installed, would also ... | c | Multiple Choice | Finance | University | 191,469 |
1437344 | You are the money manager of a $2 million dollar portfolio. The portfolio consists of 4 stocks with an equal investment in each one. The betas of the 4 stocks are 1.25, -1.75, 1.00 and 0.75. The market's required return is 12% and the risk-free rate of return is 4%. Calculate this portfolio's beta. | 0.3125 | Float | Finance | University | 125,339 |
1704500 | What's the present value of a 4-year ordinary annuity of $2,250 per year plus an additional $2,950 at the end of Year 4 if the interest rate is 5%? | $10,405.36 | Float | Finance | University | 181,337 |
1478267 | Mercken Industries is contemplating four projects: Project P, Project Q, Project R, and Project S. The capital costs and estimated after-tax net cash flows of each mutually exclusive project are listed below. Mercken's desired after-tax opportunity cost is 12 percent, and the company has a capital budget for the year o... | Project Q and R | List | Finance | University | 202,224 |
36250 | Assume that Sally would like to purchase a vehicle in 8 years with a cost of $50,000. She believes that she can achieve a 14% annual rate of return on her investment.
How much should she invest today? | $17,528 | Float | Finance | Senior High School | 84,309 |
1465018 | Suppose the company is facing a fast growth of 22% per year for the next 6 years. After that, the growth becomes constant 0%. Company's beta is 1.4; market risk premium is 3.5% and the risk-free rate is 2% Last dividend (Do) is $1.50 per share.
Find Intrinsic stock value today (show formula) | $62.69 | Float | Finance | University | 185,592 |
1925001 | You wish to retire in 10 years, at which time you want to have accumulated enough money to receive an annual annuity of $25,000 for 15 years after retirement. During the period before retirement you can earn 11 percent annually, while after retirement you can earn 13 percent on your money. What annual contributions to ... | 9,661.49 | Float | Finance | University | 120,032 |
598282 | Last year Angela used her 60% margin account and purchased 100 shares of stock at a price of $33 a share. Today she sold this stock for $36 a share. Angela paid a total of $70 in margin interest for the year. Ignoring transaction costs, what rate of return did Angela earn on this investment? | 17.42% | Percentage | Finance | Senior High School | 108,639 |
830811 | Dayton Company is considering investing in an annuity contract that will return $45,000 annually at the end of each year for 15 years. What amount should Dayton Company pay for this investment if it earns a 5% return? | $467,084.61 | Float | Finance | University | 203,425 |
1831972 | Currently, it takes five days from the time customers mail payments until Shark Bait Rafts (SBR) deposits them. SBR would like to set up a lockbox collection system that would reduce this collection float by three days. If SBR receives an average of $2,500 in payments per day and its opportunity cost is 18 percent, how... | $112.50 | Float | Finance | University | 201,737 |
1986017 | A portfolio manager plans to use a Treasury bond futures contract to hedge a bond portfolio over the next three months. The portfolio is worth $100 million and will have a duration of 4.0 years in three months. The futures price is 122, and each futures contract is on $100,000 of bonds. The bond that is expected to be ... | 364 | Integer | Finance | University | 152,099 |
798940 | True or false? Reinvestment rate risk is worse from an investor's standpoint than interest rate risk if the investor has a short investment time horizon. | False | Boolean | Finance | University | 119,566 |
1933598 | A bond with a 7% coupon rate makes payments on January 15 and July 15 of each year (181-day coupon period). On January 30 (15 days have passed since the last semiannual coupon was paid), the ask price for the bond was reported as $100.0625. On April 15, it was selling at an ask price of $101.125.
If you purchased the ... | $102.87 | Float | Finance | University | 135,139 |
626087 | A proposed cost-saving device has an installed cost of $800,000. The device will be used in a five-year project but is classified as three-year MACRS property for tax purposes. The required initial net working capital investment is $62,000, the marginal tax rate is 30 percent, and the project discount rate is 8 percent... | 204,494.49 | Float | Finance | University | 132,855 |
1837126 | How much will a firm need in cash flow before tax and interest to satisfy debt-holders and equity-holders if the tax rate is 40%, there is $10 million in common stock requiring a 12% return, and $6 million in bonds requiring an 8% return?
A. $1,392,000
B. $1,488,000
C. $2,480,000
D. $2,800,000 | C | Multiple Choice | Finance | University | 107,663 |
2094201 | Suppose the 6-month risk-free rate of return in the United States is 4%. The current exchange rate is 1 pound = US$1.70. The 6-month forward rate is 1 pound = US$1.50. What is the minimum yield on a 6-month risk-free security in Britain that would induce a U.S. investor to invest in the British security ? | 17.87% | Percentage | Finance | University | 18,087 |
1765132 | What is the expected Treasury Bill rate? Real rate =2.20% Inflation rate =3.20%. | 5.47% | Percentage | Finance | Senior High School | 90,998 |
1155698 | A business is considering a cash outlay of $300,000 for the purchase of land, which it could lease for $36,000 per year. If alternative investments are available that yield an 18% return, the opportunity cost of the purchase of the land is:
A. $36,000
B. $72,000
C. $18,000
D. $54,000 | C | Multiple Choice | Finance | University | 152,851 |
1199294 | CoinBase will generate a cash flow of $220M or $80M if next year the economy is in boom or recession respectively. The probability of recession is 30% and the probability of boom is 70%. The firm's outstanding debt has a market value today of $100M and is due in a year. The cost of debt (rD) is 8% and the unlevered cos... | $120,000,000 | Integer | Finance | University | 127,225 |
754396 | Rank the following three stocks by their total risk level, highest to lowest. Night Ryder has an average return of 12 percent and a standard deviation of 33 percent. The average return and standard deviation of WholeMart are 13 percent and 40 percent, and Fruit Fly is 18 percent and 35 percent. | WholeMart > Fruit Fly > Night Ryder | List | Finance | University | 66,945 |
2090363 | WSU Inc. has various options for replacing a piece of manufacturing equipment. The present value of costs for option Ell is $84,000. Option Ell has a useful life of 5 years; annual operating costs were discounted at 9%. What is the equivalent annual cost? | $21,595.77 | Float | Finance | University | 137,796 |
14716 | Tool makers, Inc. uses tool and die machines to produce equipment for other firms. The initial cost of one customized tool and die machine is $800,000. This machine costs $11,000 a year to operate. Each machine has a life of 3 years before it is replaced. What is the equivalent annual cost of this machine if the requir... | $332,691.84 | Float | Finance | University | 223,981 |
433563 | You want to borrow $1000 from a friend for one year, and you propose to pay her $1,120 at the end of the year. She agrees to lend you the $1,000, but she wants you to pay her $10 of interest at the end of each of the first 11 months plus $1,010 at the end of the 12th month.
How much higher is the effective annual rate... | 0.68% | Percentage | Finance | University | 138,744 |
1654033 | Mr. Jones has a 2-stock portfolio with a total value of $400,000. $300,000 is invested in Stock A and the remainder is invested in Stock B. If standard deviation of Stock A is 12.65%, Stock B is 21.55%, and correlation between Stock A and Stock B is 0.50, what would be the expected risk on Mr. Jones' portfolio? | 13.04% | Percentage | Finance | University | 110,718 |
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