idx int32 | question_id string | context string | question string | options list | image_1 image | image_2 image | image_3 image | image_4 image | image_5 image | image_6 image | image_7 image | image_type string | answers string | explanation string | topic_difficulty string | question_type string | subfield string | language string | main_question_id string | sub_question_id string | is_arithmetic int32 | ans_image_1 image | ans_image_2 image | ans_image_3 image | ans_image_4 image | ans_image_5 image | ans_image_6 image | release string |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
1,000 | english_355_1_r1 | You purchased the following futures contract today at the settlement price listed in the Wall Street Journal. Answer the questions below regarding the contract. <image_1>. Suppose the price of the futures contract changes as shown in the following table <image_2>. | Enter the relevant information missing in the table. Show your calculations. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | Profit/Loss per lb for day 1,2,3 is $0.0002, $0.0013, $0.0057, total value of contract at day 0,1,2,3 is $9714, $9162,$9240, $9582; mark-to-market settle for day 1,2,3 is -$12, $78, $342. | nan | easy | open question | derivatives | english | 355 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | ||
1,001 | english_355_2_r1 | nan | Explain why the account is marked to market daily. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | The contract is marked to market daily and profits or losses are posted in the account. The contract keeps pace with market activity and doesn't change value all at once at the maturity date. The marking-to-market process protects the clearinghouse because the margin percentage is calculated daily and if it falls below... | nan | easy | open question | derivatives | english | 355 | 2 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,002 | english_356_1_r1 | Consider the following: <image_1>, | If the futures market price is 1.63 A$/$, how could you arbitrage? | [
"A. Borrow Australian dollars in Australia, convert them to dollars, lend the proceeds in the United States, and enter futures positions to purchase Australian dollars at the current futures price.",
"B. Borrow U.S. dollars in the United States, convert them to Australian dollars, lend the proceeds in Australia, ... | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | E0(1 + rUS) - F0(1 + rA); use the U.S. dollar values for the currency: 0.5988(1.04) - 0.6135(1.03) = -0.009153; when relationship is negative, action b will result in arbitrage profits. | easy | multiple-choice | derivatives | english | 356 | 1 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |
1,003 | english_356_2_r1 | nan | If the market futures price is 1.69 A$/$, how could you arbitrage? | [
"A. Borrow Australian dollars in Australia, convert them to dollars, lend the proceeds in the United States, and enter futures positions to purchase Australian dollars at the current futures price.",
"B. Borrow U.S. dollars in the United States, convert them to Australian dollars, lend the proceeds in Australia, ... | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | 0.5988(1.04) - 0.5917(1.03) = 0.013301; when this relationship is positive; action a will result in arbitrage profits. | easy | multiple-choice | derivatives | english | 356 | 2 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,004 | english_356_3_r1 | nan | Assume the current market futures price is 1.66 A$/$. You borrow 167,000 A$ and convert the proceeds to U.S. dollars and invest them in the U.S. at the risk-free rate. You simultaneously enter a contract to purchase 170,340 A$ at the current futures prices (maturity of 1 year). What would be your profit (loss)? | [
"A. Profit of 630 A$",
"B. Loss of 2300 A$",
"C. Profit of 2300 A$",
"D. Loss of 630 A$"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | [A$167,000/1.67 × 1.04 × 1.66] - (A$167,000 × 1.03) = A$630. | easy | multiple-choice | derivatives | english | 356 | 3 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,005 | english_357_1_r1 | You are given the following information about a portfolio you are to manage. For the long-term you are bullish, but you think the market may fall over the next month. <image_1> | If the anticipated market value materializes, what will be your expected loss on the portfolio? | [
"A. 14.29%",
"B. 16.67%",
"C. 15.43%",
"D. 8.57%",
"E. 6.42%"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | D | The change would represent a drop of (1,200 - 1,400)/1,400 = 14.3% in the index. Given the portfolio's beta, your portfolio would be expected to lose 0.6 × 14.3% = 8.57%. | easy | multiple-choice | portfolio management | english | 357 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |
1,006 | english_357_2_r1 | nan | What is the dollar value of your expected loss? | [
"A. $142,900",
"B. $16,670",
"C. $85,700",
"D. $30,000",
"E. $64,200"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | C | The dollar value equals the loss of 8.57% times the $1 million portfolio value = $85,700. | easy | multiple-choice | portfolio management | english | 357 | 2 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,007 | english_357_3_r1 | nan | For a 200-point drop in the S&P 500, by how much does the value of the futures position change? | [
"A. $200,000",
"B. $50,000",
"C. $250,000",
"D. $500,000",
"E. $100,000"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | The change is 200 points times the $250 multiplier, which equals $50,000. | easy | multiple-choice | portfolio management | english | 357 | 3 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,008 | english_357_4_r1 | nan | How many contracts should you buy or sell to hedge your position? Allow fractions of contracts in your answer | [
"A. sell 1.714",
"B. buy 1.714",
"C. sell 4.236",
"D. buy 4.236",
"E. sell 11.235"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | The number of contracts equals the hedge ratio = change in portfolio value/profit on one futures contract = $85,700/$50,000 = 1.714. You should sell the contract because as the market falls the value of the futures contract will rise and will offset the decline in the portfolio's value. | easy | multiple-choice | portfolio management | english | 357 | 4 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,009 | english_358_1_r1 | You are given the following information about a portfolio you are to manage. For the long-term you are bullish, but you think the market may fall over the next month. <image_1> | If the anticipated market value materializes, what will be your expected loss on the portfolio? | [
"A. 7.58%",
"B. 6.52%",
"C. 15.43%",
"D. 8.57%",
"E. 6.42%"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | The change would represent a drop of (915 - 990)/990 = 7.58% in the index. Given the portfolio's beta, your portfolio would be expected to lose 0.86 × 7.58% = 6.52%. | easy | multiple-choice | portfolio management | english | 358 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |
1,010 | english_358_2_r1 | nan | What is the dollar value of your expected loss? | [
"A. $142,900",
"B. $65,200",
"C. $85,700",
"D. $30,000",
"E. $64,200"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | The dollar value equals the loss of 6.52% times the $1 million portfolio value = $65,200. | easy | multiple-choice | portfolio management | english | 358 | 2 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,011 | english_358_3_r1 | nan | For a 75-point drop in the S&P 500, by how much does the futures position change? | [
"A. $200,000",
"B. $50,000",
"C. $250,000",
"D. $500,000",
"E. $18,750"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | E | The change is 75 points times the $250 multiplier, which equals $18,750. | easy | multiple-choice | portfolio management | english | 358 | 3 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,012 | english_358_4_r1 | nan | How many contracts should you buy or sell to hedge your position? Allow fractions of contracts in your answer. | [
"A. Sell 3.477",
"B. Buy 3.477",
"C. Sell 4.236",
"D. Buy 4.236",
"E. Sell 11.235"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | The number of contracts equals the hedge ratio equals: Change in portfolio value/profit on one futures contract = $65,200/$18,750 = 3.477. You should sell the contract because as the market falls the value of the futures contract will rise and will offset the decline in the portfolio's value. | easy | multiple-choice | portfolio management | english | 358 | 4 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,013 | english_359_1_r1 | You want to evaluate three mutual funds using the information ratio measure for performance evaluation. The risk-free return during the sample period is 6%, and the average return on the market portfolio is 19%. The average returns, residual standard deviations, and betas for the three funds are given below. <image_1> | The fund with the highest information ratio measure is | [
"A. Fund A.",
"B. Fund B.",
"C. Fund C.",
"D. Funds A and B (tied for highest)",
"E. Funds A and C (tied for highest)"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | Information ratio = αP/σ(eP); A: αP = 20 - 6 - .8(19 - 6) = 3.6; 3.6/4 = 0.9; B: αP = 21 - 6 - 1(19 - 6) = 2.0; 2/1.25 = 1.6; C: αP = 23 - 6 - 1.2(19 - 6) = 1.4; 1.4/1.20 = 1.17. | easy | multiple-choice | portfolio management | english | 359 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |
1,014 | english_360_1_r1 | You want to evaluate three mutual funds using the Sharpe measure for performance evaluation. The risk-free return during the sample period is 6%. The average returns, standard deviations, and betas for the three funds are given below, as are the data for the S&P 500 Index. <image_1> | The fund with the highest Sharpe measure is | [
"A. Fund A.",
"B. Fund B.",
"C. Fund C.",
"D. Funds A and B (tied for highest)",
"E. Funds A and C (tied for highest)"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | C | A: (24% - 6%)/30% = 0.60; B: (12% - 6%)/10% = 0.60; C: (22% - 6%)/20% = 0.80; S&P 500: (18% - 6%)/16% = 0.75. | easy | multiple-choice | portfolio management | english | 360 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |
1,015 | english_361_1_r1 | You want to evaluate three mutual funds using the Jensen measure for performance evaluation. The risk-free return during the sample period is 6%, and the average return on the market portfolio is 18%. The average returns, standard deviations, and betas for the three funds are given below. <image_1> | The fund with the highest Jensen measure is | [
"A. Fund A.",
"B. Fund B.",
"C. Fund C.",
"D. Funds A and B (tied for highest)",
"E. Funds A and C (tied for highest)"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | C | A: 17.6% - [6% + 1.2(18% - 6%)] = -2.8%; B: 17.5% - [6% + 1.0(18% - 6%)] = -0.5; C: 17.4% - [6% + 0.8(18% - 6%)] = +1.8. | easy | multiple-choice | portfolio management | english | 361 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |
1,016 | english_362_1_r1 | The following data are available relating to the performance of Sooner Stock Fund and the market portfolio: <image_1> | The risk-free return during the sample period was 3%. What is the Sharpe measure of performance evaluation for Sooner Stock Fund? | [
"A. 1.33%",
"B. 4.00%",
"C. 8.67%",
"D. 38.6%",
"E. 37.14%"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | D | (20% - 3%)/44% = 0.386, or 38.6%. | easy | multiple-choice | portfolio management | english | 362 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |
1,017 | english_362_2_r1 | nan | The risk-free return during the sample period was 3%. What is the Treynor measure of performance evaluation for Sooner Stock Fund? | [
"A. 1.33%",
"B. 4.00%",
"C. 8.67%",
"D. 9.44%",
"E. 37.14%"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | D | (20% - 3%)/1.8 = 9.44%. | easy | multiple-choice | portfolio management | english | 362 | 2 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,018 | english_362_3_r1 | nan | The risk-free return during the sample period was 3%. Calculate the Jensen measure of performance evaluation for Sooner Stock Fund. | [
"A. 2.6%",
"B. 4.00%",
"C. 8.67%",
"D. 31.43%",
"E. 37.14%"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | αP = 20% - [3% + 1.8(11% - 3%)] = 2.6%. | easy | multiple-choice | portfolio management | english | 362 | 3 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,019 | english_362_4_r1 | nan | The risk-free return during the sample period was 3%. Calculate the information ratio for Sooner Stock Fund. | [
"A. 1.53",
"B. 1.30",
"C. 8.67",
"D. 31.43",
"E. 37.14"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | αP = 20% - [3% + 1.8(11% - 3%)] = 2.6%, 2.6%/2.00% = 1.3. | easy | multiple-choice | portfolio management | english | 362 | 4 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,020 | english_363_1_r1 | The following data are available relating to the performance of Monarch Stock Fund and the market portfolio: <image_1> | The risk-free return during the sample period was 4%. What is the information ratio measure of performance evaluation for Monarch Stock Fund? | [
"A. 1.00%",
"B. 280.00%",
"C. 44.00%",
"D. 50.00%",
"E. None of the options"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | αP = 16% - [4% + 1.15(12% - 4%)] = 2.8%; αP/σ(eP) = 2.8%/1% = 2.8, or 280%. | easy | multiple-choice | portfolio management | english | 363 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |
1,021 | english_363_2_r1 | nan | The risk-free return during the sample period was 4%. Calculate Sharpe's measure of performance for Monarch Stock Fund. | [
"A. 1%",
"B. 46%",
"C. 44%",
"D. 50%",
"E. None of the options"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | (16 - 4)/26 = .46 | easy | multiple-choice | portfolio management | english | 363 | 2 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,022 | english_363_3_r1 | nan | The risk-free return during the sample period was 4%. Calculate Treynor's measure of performance for Monarch Stock Fund. | [
"A. 10.40%",
"B. 8.80%",
"C. 44.00%",
"D. 50.00%"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | (16 - 4)/1.15 = 10.4. | easy | multiple-choice | portfolio management | english | 363 | 3 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,023 | english_363_4_r1 | nan | The risk-free return during the sample period was 4%. Calculate Jensen's measure of performance for Monarch Stock Fund. | [
"A. 1.00%",
"B. 2.80%",
"C. 44.00%",
"D. 50.00%"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | 16 - [4 + 1.15 (12 - 4)] = 2.80%. | easy | multiple-choice | portfolio management | english | 363 | 4 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,024 | english_364_1_r1 | The following data are available relating to the performance of Seminole Fund and the market portfolio: <image_1> | The risk-free return during the sample period was 6%. If you wanted to evaluate the Seminole Fund using the M2 measure, what percent of the adjusted portfolio would need to be invested in T-Bills? | [
"A. -36% (borrow)",
"B. 50%",
"C. 8%",
"D. 36%",
"E. 27%"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | E | 22/30 = .7333, or 73.33% invested in Seminole Fund and 1 - 73.33% = 26.67% in T-Bills. | easy | multiple-choice | portfolio management | english | 364 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |
1,025 | english_364_2_r1 | nan | The risk-free return during the sample period was 6%. Calculate the M2 measure for the Seminole Fund. | [
"A. 4.0%",
"B. 20.0%",
"C. 2.86%",
"D. 0.8%",
"E. 40.0%"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | D | 22/30 = .7333; 1 - .7333 = .2667; M2 = [.7333 (18) + .2667 (6)] - 14 = 0.8%. | easy | multiple-choice | portfolio management | english | 364 | 2 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,026 | english_365_1_r1 | The following data are available relating to the performance of Wildcat Fund and the market portfolio: <image_1> | The risk-free return during the sample period was 7%. What is the information ratio measure of performance evaluation for Wildcat Fund? | [
"A. 1.00%",
"B. 8.80%",
"C. 44.00%",
"D. 50.00%"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | D | αP = 18% - [7% + 1.25(15% - 7%)] = 1%; αP/σ(eP) = 1%/2% = 0.50, or 50.00%. | easy | multiple-choice | portfolio management | english | 365 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |
1,027 | english_365_2_r1 | nan | The risk-free return during the sample period was 7%. Calculate Sharpe's measure of performance for Wildcat Fund. | [
"A. 1.00%",
"B. 8.80%",
"C. 44.00%",
"D. 50.00%"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | C | (18 - 7)/25 = .44. | easy | multiple-choice | portfolio management | english | 365 | 2 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,028 | english_365_3_r1 | nan | The risk-free return during the sample period was 7%. Calculate Treynor's measure of performance for Wildcat Fund. | [
"A. 1.00%",
"B. 8.80%",
"C. 44.00%",
"D. 50.00%"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | (18 - 7)/1.25 = 8.8. | easy | multiple-choice | portfolio management | english | 365 | 3 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,029 | english_365_4_r1 | nan | The risk-free return during the sample period was 7%. Calculate Jensen's measure of performance for Wildcat Fund. | [
"A. 1.00%",
"B. 8.80%",
"C. 44.00%",
"D. 50.00%"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | 18 - [7 + 1.25 (15 - 7)] = 1.00%. | easy | multiple-choice | portfolio management | english | 365 | 4 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,030 | english_366_1_r1 | The following data are available relating to the performance of Long Horn Stock Fund and the market portfolio: <image_1> | The risk-free return during the sample period was 6%. Calculate the Jensen measure of performance evaluation for Long Horn Stock Fund. | [
"A. 1.33%",
"B. 4.00%",
"C. 8.67%",
"D. 31.43%",
"E. 37.14%"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | αP = 19% - [6% + 1.5(12% - 6%)] = 4.00%. | easy | multiple-choice | portfolio management | english | 366 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |
1,031 | english_366_2_r1 | nan | The risk-free return during the sample period was 6%. Calculate the information ratio for Long Horn Stock Fund. | [
"A. 1.33",
"B. 4.00",
"C. 8.67",
"D. 31.43",
"E. 37.14"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | αP = 19% - [6% + 1.5(12% - 6%)] = 4.00%, 4.00%/3.00% = 1.33. | easy | multiple-choice | portfolio management | english | 366 | 2 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,032 | english_367_1_r1 | In a particular year, Razorback Mutual Fund earned a return of 1% by making the following investments in asset classes: <image_1>. The return on a bogey portfolio was 2%, calculated from the following information. <image_2> | The total excess return on the Razorback Fund's managed portfolio was | [
"A. -1.80%.",
"B. -1.00%.",
"C. 0.80%.",
"D. 1.00%."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | 1% - 2% = -1%. | easy | multiple-choice | portfolio management | english | 367 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | ||||
1,033 | english_367_2_r1 | nan | The contribution of asset allocation across markets to the Razorback Fund's total excess return was | [
"A. -1.80%.",
"B. -1.00%.",
"C. 0.80%.",
"D. 1.00%."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | <ans_image_1> | easy | multiple-choice | portfolio management | english | 367 | 2 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,034 | english_367_3_r1 | nan | The contribution of selection within markets to the Razorback Fund's total excess return was | [
"A. -1.80%.",
"B. -1.00%.",
"C. 0.80%.",
"D. 1.00%."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | C | <ans_image_2> | easy | multiple-choice | portfolio management | english | 367 | 3 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,035 | english_368_1_r1 | In a particular year, Aggie Mutual Fund earned a return of 15% by making the following investments in the following asset classes: <image_1>. The return on a bogey portfolio was 10%, calculated as follows: <image_2> | The total excess return on the Aggie managed portfolio was | [
"A. 1%.",
"B. 3%.",
"C. 4%.",
"D. 5%."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | D | 15% - 10% = 5%. | easy | multiple-choice | portfolio management | english | 368 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | ||||
1,036 | english_368_2_r1 | nan | The contribution of asset allocation across markets to the total excess return was | [
"A. 1%.",
"B. 3%.",
"C. 4%.",
"D. 5%."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | C | <ans_image_1> | easy | multiple-choice | portfolio management | english | 368 | 2 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,037 | english_368_3_r1 | nan | The contribution of selection within markets to total excess return was | [
"A. 1%.",
"B. 3%.",
"C. 4%.",
"D. 5%."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | <ans_image_2> | easy | multiple-choice | portfolio management | english | 368 | 3 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,038 | english_369_1_r1 | For the general one-period model <image_1>, we call the beginning of the period time zero and the end of the period time one. At time zero, we have
a stock whose price per share we denote by $S_0$, a positive quantity known at time zero. At time one, the price per share of this stock will be one of two
positive values,... | In the one-period binomial model. what relationship between $u,d,r$ must hold to rule out arbitrage? | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | chart | $0 < d < 1 + r < u $ | The inequality $d > 0$ follows from the positivity of the stock prices and was already assumed. The two other inequalities follow from the absence of arbitrage, as we now explain. If $ d \geq 1 + r $, one could begin with zero wealth and at time zero borrow from the money market one stock at time one will be worth even... | hard | open question | derivatives | english | 369 | 1 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |
1,039 | english_369_2_r1 | nan | In the general one-period model, we define a derivative security to be a security that pays some amount $V_1(H)$ at time one if the coin toss results
in head and pays a possibly different amount $V_1(T)$ at time one if the coin toss results in tail. A European call option is a particular kind of derivative
security. An... | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | chart | $X_1 = (1 + r) X_0 + \Delta_0 (S_1 - (1 + r) S_0)$. | $X_1 = \Delta_0 S_1 + (1 + r)(X_0 - \Delta_0 S_0) = (1 + r) X_0 + \Delta_0 (S_1 - (1 + r) S_0)$. | hard | open question | derivatives | english | 369 | 2 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,040 | english_369_3_r1 | nan | We want to choose $X_0$ and $\Delta_0$ so that $X_1(H) = V_1(H)$ and $X_1(T) = V_1(T)$.
(Note here that $V_1(H)$ and $V_1(T)$ are given quantities, the amounts the derivative
security will pay off depending on the outcome of the coin tosses. At time zero, write down the two equations that are required to replicate th... | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | chart | $X_0 + \Delta_0 \left( \frac{1}{1 + r} S_1(H) - S_0 \right) = \frac{1}{1 + r} V_1(H)$,
$X_0 + \Delta_0 \left( \frac{1}{1 + r} S_1(T) - S_0 \right) = \frac{1}{1 + r} V_1(T)$. | nan | hard | open question | derivatives | english | 369 | 3 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,041 | english_369_4_r1 | nan | One way to solve these two equations, in the previous question, is to multiply the first
by a number $\tilde{p}$ and the second by $\tilde{q} = 1 - \tilde{p}$ and then add them to get a function of $V_1(H), V_1(T)$, what is it exactly? | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | chart | $\frac{1}{1 + r} [ \tilde{p} V_1(H) + \tilde{q} V_1(T) ]$ | $X_0 + \Delta_0 \left( \frac{1}{1 + r} [ \tilde{p} S_1(H) + \tilde{q} S_1(T) ] - S_0 \right) = \frac{1}{1 + r} [ \tilde{p} V_1(H) + \tilde{q} V_1(T) ].$ | hard | open question | derivatives | english | 369 | 4 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,042 | english_369_5_r1 | nan | continued from the previous question, if we choose $\tilde{p}$ so that $S_0 = \frac{1}{1 + r} [ \tilde{p} S_1(H) + \tilde{q} S_1(T) ]$, please solve $\tilde{p},\tilde{q}$ | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | chart | $\tilde{p} = \frac{1+r-d}{u-d}$, $\tilde{q} = \frac{u-1-r}{u-d}$. | $S_0 &= \frac{1}{1+r} \left[ p u S_0 + (1-p) d S_0 \right] = \frac{S_0}{1+r} \left[ (u-d) p + d \right]$
This leads to the formulas
$\tilde{p} &= \frac{1+r-d}{u-d}, \quad \tilde{q} = \frac{u-1-r}{u-d}$ | hard | open question | derivatives | english | 369 | 5 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,043 | english_369_6_r1 | nan | We call $\tilde{p},\tilde{q}$ the risk neural probabilities and we use them to price the derivative security that pays $V_1$ at time one. Write down the risk nueral pricing formula for $V_0$. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | chart | $V_0 = \frac{1}{1+r} [\tilde{p} V_1(H) + \tilde{q} V_1(T)]$ | $\tilde{p},\tilde{q}$ can be seen as the probability in the risk-neural probability space. | hard | open question | derivatives | english | 369 | 6 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,044 | english_369_7_r1 | nan | In the one-period binomial model, suppose we want to determine the price at time zero of the derivative security $V_1 = S_1$ (i.e., the derivative security pays off the stock price). (This can be regarded as a European call with strike price \( K = 0 \)).
What is the time-zero price $V_0$ given by the risk-neutral pri... | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | chart | $V_0=S_0$ | Proof. $V_0=\frac{1}{1+r}\left[\frac{1+r-d}{u-d}S_1(H)+\frac{u-1-r}{u-d}S_1(T)\right]=\frac{S_0}{1+r}\left[\frac{1+r-d}{u-d}u+\frac{u-1-r}{u-d}d\right]=S_0$. This is not surprising, since this is exactly the cost of replicating $S_1$.
This illustrates an important point. The “fair price” of a stock cannot be determined... | hard | open question | derivatives | english | 369 | 7 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,045 | english_370_1_r1 | We have a three-period binomial model shown below <image_1>. At time zero, we have
a stock whose price per share we denote by $S_0$, a positive quantity known at time zero. At time one, the price per share of this stock will be one of two
positive values, which we denote $S_1(H)$ and $S_1(T)$, the $H$ and $T$ standing... | Assume risk-neural probability for the up and down move $\tilde{p}=0.5,\tilde{q}=0.5$, compute the conditional expectation of $S_2$ based on the information at time $1$ under the risk neural measure $\mathcal{\tilde{E}}[S_2](H), \mathcal{\tilde{E}}[S_2](T)$ | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | chart | $\mathbb{\tilde{E}}_1[S_2](H)=10, \mathbb{\tilde{E}}_1[S_2](T)=2.5$ | $\mathbb{\tilde{E}}_1[S_2](H)=0.5*(16+4)=10$,$\mathbb{\tilde{E}}_1[S_2](T)=0.5*(4+1)=0.25$. | hard | open question | derivatives | english | 370 | 1 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |||
1,046 | english_370_2_r1 | nan | Assme the actual probability for the up and down move $p=2/3, q=1/3$, compute $\mathbb{E}_1[S_2+S_3](H)$ under the actual probability. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | chart | $\mathbb{E}_1[S_2+S_3](H)=30$ | $\mathbb{E}_1[S_2](H) = \frac{2}{3} \cdot 16 + \frac{1}{3} \cdot 4 = 12,$
$\mathbb{E}_1[S_3](H) = \frac{4}{9} \cdot 32 + \frac{2}{9} \cdot 8 + \frac{2}{9} \cdot 8 + \frac{1}{9} \cdot 2 = 18$
and consequently $\mathbb{E}_i[S_2](H) + \mathbb{E}_i[S_3](H) = 12 + 18 = 30.$ | hard | open question | derivatives | english | 370 | 2 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,047 | english_370_3_r1 | nan | Assme the actual probability for the up and down move $p=2/3, q=1/3$, compute $\mathbb{E}_1[\mathbb{E}_2[S_3]](H), \mathbb{E}_1[\mathbb{E}_2[S_3]](T)$ under the actual probability. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | chart | $\mathbb{E}_1[\mathbb{E}_2[S_3]](H)=18, \mathbb{E}_1[\mathbb{E}_2[S_3]](H)=4.5$ | $
\mathbb{E}_2[S_3(HH)] = \frac{2}{3} \cdot 3 + \frac{1}{3} \cdot 8 = 2 + \frac{8}{3}, \\
\mathbb{E}_2[S_3(HT)] = \frac{2}{3} \cdot 3 + \frac{1}{3} \cdot 2 = 2 + \frac{2}{3}, \\
\mathbb{E}_2[S_3(TH)] = \frac{2}{3} \cdot 8 + \frac{1}{3} \cdot 4 = \frac{16}{3} + \frac{4}{3} = 6, \\
\mathbb{E}_2[S_3(TT)] = \frac{2}{3} \cd... | hard | open question | derivatives | english | 370 | 3 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,048 | english_370_4_r1 | nan | Consider the maximum-to-date process $M_n=\max_{0 \le k \le n} S_k shown in <image_2>, under the actual probability for the up and down move $p=2/3, q=1/3$, compute $\mathbb{E}_2[M3](TH), \mathbb{E}_2[M3](TT)$. And conclude if $M_n$ is Markov? | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | chart | $\mathbb{E}_2[M_3](TH)=6\frac{2}{3}, \mathbb{E}_2[M_3](TT)=4$. $M_n$ is not Markov. | <ans_image_1> | hard | open question | derivatives | english | 370 | 4 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,049 | english_371_1_r1 | The following are prices of options traded on X Corporation, which pays no dividends. <image_1>. The stock is trading at $83, and the annualized riskless rate is 3.8%. The standard deviation in ln stock prices (based upon historical data) is 30%. | Estimate the value of a three-month call, with a strike price of 85. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | $4.42 | The values of the option parameters are as follows:
S = $83
K = $85
t = 0.25
r = 3.80%
Variance = 0.09
Value of call = $4.42 | medium | open question | derivatives | english | 371 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | ||
1,050 | english_371_2_r1 | nan | Using the inputs from the Black-Scholes model, specify how you would replicate this call. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | buy 0.4919 Shares of Stock and borrow $36.40. | To replicate this call, you would have to: buy 0.4919 Shares of Stock (this is N(d1) from the model) and borrow K e-rt N(d2) = 85 exp-(0.038)(0.25) (0.4324) = $36.40 | medium | open question | derivatives | english | 371 | 2 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,051 | english_371_3_r1 | nan | What is the implied standard deviation in this call? | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | 0.2739 | At an implied variance of 0.075, the call has a value of approximately $4.00 (the market price).
Implied Standard Deviation = sqrt(0.075) = 0.2739 | medium | open question | derivatives | english | 371 | 3 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,052 | english_371_4_r1 | nan | Using put-call parity, estimate the value of a three-month put with a strike price of 85. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | $5.62 | Value of Three-month Put = C - S + Ke-rt = $4.42 - $83 + 85 exp-(0.038)(0.25) = $5.62 | medium | open question | derivatives | english | 371 | 4 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,053 | english_372_1_r1 | nan | A new security on AT&T will entitle the investor to all dividends on AT&T over the next three years, limit upside potential to 20%, but also provide downside protection below 10%. AT&T stock is trading at $50, and three-year call and put options are traded on the exchange at the following prices
<image_2>
H... | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | $46.44 | New Security = AT & T stock - Call (K=60) + Put (K=45)= $50 - $7.11 + $3.55 = $46.44
The call with a strike price of $60 is sold, eliminating upside potential above $60. The put with a strike price of $45 is bought, providing downside protection. | hard | open question | derivatives | english | 372 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | ||
1,054 | english_373_1_r1 | McCaw Cellular Communications reported earnings before interest and taxes of $850 million in 1993, with a depreciation allowance of $400 million and capital expenditures of $ 550 million in that year; the working capital requirements were negligible. The earnings before interest and taxes and net cap ex are expected to... | Estimate the value of the firm. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | $13,386.28 million | Current free cashflow to firm = $ 850* (1-.4) – (550 – 400) = $ 700 million
<ans_image_1>
I used a reinvestment rate of 33.33% (5/15) in the terminal year.
Terminal value = 888.33/(.10-.05) = $ 17,766
Value of firm = 392.73 + 428.43 + 467.38 + 509.87 + 556.22 + 17766.60/(1.1^5) = $13,386.28 million | hard | open question | derivatives | english | 373 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |
1,055 | english_373_2_r1 | nan | Estimate the value of the equity. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | $ 4958 million | Value of equity as an option
S = 13386.28
K = 10000.00
T = Weighted duration of debt = 3 years
Riskless rate = 5%
Variance in firm value = (.35)(.4)^2+(.15)(.6)^2+ 2 (.35)(.15)(.5)(.4)(.6) = .20 = 0.0403
Value of equity = $ 4958 million | hard | open question | derivatives | english | 373 | 2 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,056 | english_373_3_r1 | nan | The stock was trading at $60 and there were 210 million shares outstanding in January 1994. Estimate the implied standard deviation in firm value. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | 46.53%. | If the market value of equity = 30 * 210 = $ 6300 million
Trial and error yields an implied standard deviation of 46.53%. | hard | open question | derivatives | english | 373 | 3 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,057 | english_373_4_r1 | nan | Estimate the market value of the debt. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | $8,428 million | Value of debt = Firm value – Value of equity
= 13386 – 4958 = $8,428 million | hard | open question | derivatives | english | 373 | 4 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,058 | english_374_1_r1 | The Stancil Corporation provided the following current information:
<image_1> | Determine the cash flows from the firm. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | $29,300 | With the information provided, the cash flows from the firm are the capital spending and the change in net working capital, so:
<ans_image_1> | easy | open question | corporate finance | english | 374 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |||
1,059 | english_374_2_r1 | nan | Determine the cash flows to investors of the firm. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | $7,600 | And the cash flows to the investors of the firm are:
<ans_image_2> | easy | open question | corporate finance | english | 374 | 2 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,060 | english_375_1_r1 | Consider the following abbreviated financial statements for Weston Enterprises:
<image_1>
<image_2> | What is owners’ equity for 2014? | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | $2,567 | Total assets 2014 = $964 + 4,384 = $5,348
Total liabilities 2014 = $401 + 2,380 = $2,781
Owners’ equity 2014 = $5,348 – 2,781 = $2,567 | easy | open question | corporate finance | english | 375 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | ||
1,061 | english_375_2_r1 | nan | What is owners’ equity for 2015? | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | $3,122 | Total assets 2015 = $1,176 + 5,104 = $6,280
Total liabilities 2015 = $445 + 2,713 = $3,158
Owners’ equity 2015 = $6,280 – 3,158 = $3,122 | easy | open question | corporate finance | english | 375 | 2 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,062 | english_375_3_r1 | nan | What is the change in net working capital for 2015? | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | $168 | NWC 2014 = CA14 – CL14 = $964 – 401 = $563
NWC 2015 = CA15 – CL15 = $1,176 – 445 = $731
Change in NWC = NWC15 – NWC14 = $731 – 563 = $168 | easy | open question | corporate finance | english | 375 | 3 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,063 | english_375_4_r1 | nan | In 2015, Weston Enterprises purchased $2,350 in new fixed assets. How much in fixed assets did Weston Enterprises sell? | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | $440 | We can calculate net capital spending as:
Net capital spending = Net fixed assets 2015 – Net fixed assets 2014 + Depreciation
Net capital spending = $5,104 – 4,384 + 1,190
Net capital spending = $1,910
So, the company had a net capital spending cash flow of $1,910. We also know that net capital spending is:
... | easy | open question | corporate finance | english | 375 | 4 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,064 | english_375_5_r1 | nan | In 2015, Weston Enterprises purchased $2,350 in new fixed assets. What is the cash flow from assets for the year? (The tax rate is 40 percent.) | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | $3,814 | To calculate the cash flow from assets, we must first calculate the operating cash flow. The operating cash flow is calculated as follows (you can also prepare a traditional income statement):
EBIT = Sales – Costs – Depreciation
EBIT = $14,740 – 5,932 – 1,190
EBIT = $7,618
EBT = EBIT – Interest
EBT = $7,618... | easy | open question | corporate finance | english | 375 | 5 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,065 | english_375_6_r1 | nan | During 2015, Weston Enterprises raised $455 in new long-term debt. How much long-term debt must Weston Enterprises have paid off during the year? | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | $122 | Net new borrowing = LTD15 – LTD14
Net new borrowing = $2,713 – 2,380
Net new borrowing = $333
Net new borrowing = $333 = Debt issued – Debt retired
Debt retired = $455 – 333
Debt retired = $122 | easy | open question | corporate finance | english | 375 | 6 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,066 | english_375_7_r1 | nan | During 2015, Weston Enterprises raised $455 in new long-term debt. What is the cash flow to creditors? | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | –$5 | Cash flow to creditors = Interest – Net new LTD
Cash flow to creditors = $328 – 333
Cash flow to creditors = –$5 | easy | open question | corporate finance | english | 375 | 7 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,067 | english_376_1_r1 | Use the following information for Ingersoll, Inc. (assume the tax rate is 34 percent):
<image_1>
<image_2>
<image_3>
<image_4>
<image_5> | For 2015, calculate the cash flow from assets. | null | Not supported with pagination yet | Not supported with pagination yet | table | –$493.02 | OCF = EBIT + Depreciation – Taxes
OCF = $4,427 + 1,351 – 1,259.02
OCF = $4,518.98
Change in NWC = NWC_{end} – NWC_{beg} = (CA – CL)_{end} – (CA – CL)_{beg}
Change in NWC = ($25,522 – 5,917) – ($23,062 – 6,132)
Change in NWC = $2,675
Net capital spending = NFA_{end} – NFA_{beg} + Depreciation
Net capital... | medium | open question | corporate finance | english | 376 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |||||
1,068 | english_376_2_r1 | nan | For 2015, calculate the cash flow to creditors. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | –$2,384 | Cash flow to creditors = Interest – Net new LTD
Net new LTD = LTD_{end} – LTD_{beg}
Cash flow to creditors = $724 – ($19,260 – 16,152)
Cash flow to creditors = –$2,384 | medium | open question | corporate finance | english | 376 | 2 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,069 | english_376_3_r1 | nan | For 2015, calculate the cash flow to stockholders. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | $1,890.98 | Net new equity = Common stock_{end} – Common stock_{beg}
Common stock + Retained earnings = Total owners’ equity
Net new equity = (OE – RE)_{end} – (OE – RE)_{beg}
Net new equity = OE_{end} – OE_{beg} + RE_{beg} – RE_{end}
RE_{end} = RE_{beg} + Additions to RE
So: Net new equity = OE_{end} – OE_{beg} + RE_{beg}... | medium | open question | corporate finance | english | 376 | 3 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,070 | english_377_1_r1 | The most recent financial statements for Heine, Inc., are shown here:
<image_1>
Assets and costs are proportional to sales. Debt and equity are not. A dividend of $3,500 was paid, and the company wishes to maintain a constant payout ratio. Next year’s sales are projected to be $45,426. | What external financing is needed? | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | $13,184.18 | An increase of sales to $45,426 is an increase of:
Sales increase = ($45,426 – 40,200) / $40,200
Sales increase = .1300, or 13.00%
Assuming costs and assets increase proportionally, the pro forma financial statements will look like this:
<ans_image_1>
The payout ratio is constant, so the dividends paid this year... | hard | open question | corporate finance | english | 377 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | ||
1,071 | english_378_1_r1 | The most recent financial statements for Wise Co. are shown here:
<image_1>
Assets and costs are proportional to sales. The company maintains a constant 30 percent dividend payout ratio and a constant debt-equity ratio. | What is the maximum increase in sales that can be sustained assuming no new equity is issued? | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | $5,845.58 | The maximum percentage sales increase without issuing new equity is the sustainable growth rate. To calculate the sustainable growth rate, we first need to calculate the ROE, which is:
ROE = NI / TE
ROE = $14,190 / $83,000
ROE = .1710
The plowback ratio, b, is one minus the payout ratio, so:
b = 1 – .30
b = .7... | medium | open question | corporate finance | english | 378 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |
1,072 | english_379_1_r1 | The most recent financial statements for Williamson Inc., are shown here (assuming no income taxes):
<image_1>
Assets and costs are proportional to sales. Debt and equity are not. No dividends are paid. Next year’s sales are projected to be $9,006. | What is the external financing needed? | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | $430 | An increase of sales to $9,006 is an increase of:
Sales increase = ($9,006 – 7,900) / $7,900
Sales increase = .14, or 14%
Assuming costs and assets increase proportionally, the pro forma financial statements will look like this:
<ans_image_1>
If no dividends are paid, the equity account will increase by the net ... | easy | open question | corporate finance | english | 379 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | ||
1,073 | english_380_1_r1 | The most recent financial statements for Moose Tours, Inc., appear below. Sales for 2016 are projected to grow by 20 percent. Interest expense will remain constant, the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spo... | If the firm is operating at full capacity and no new debt or equity is issued, what external financing is needed to support the 20 percent growth rate in sales? | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | $7,583 | Assuming costs vary with sales and a 20 percent increase in sales, the pro forma income statement will look like this:
<ans_image_1>
The payout ratio is constant, so the dividends paid this year is the payout ratio from last year times net income, or:
Dividends = ($27,331 / $91,104)($110,799)
Dividends = $33,239
A... | medium | open question | corporate finance | english | 380 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |||
1,074 | english_381_1_r1 | <image_1> | Compute the present value for the first row in the table. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | $8,047.44 | To find the PV of a lump sum, we use:
PV = FV / (1 + r)^{t}
<ans_image_1>
PV = $13,827 / (1.07)^{8} = $8,047.44 | easy | open question | corporate finance | english | 381 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | release_basic | |||||
1,075 | english_381_2_r1 | nan | Compute the present value for the second row in the table. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | $7,127.18 | To find the PV of a lump sum, we use:
PV = FV / (1 + r)^{t}
<ans_image_2>
PV = $43,852 / (1.15)^{13} = $7,127.18 | easy | open question | corporate finance | english | 381 | 2 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,076 | english_381_3_r1 | nan | Compute the present value for the third row in the table. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | $123,048.11 | To find the PV of a lump sum, we use:
PV = FV / (1 + r)^{t}
<ans_image_3>
PV = $725,380 / (1.11)^{17} = $123,048.11 | easy | open question | corporate finance | english | 381 | 3 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,077 | english_381_4_r1 | nan | Compute the present value for the fourth row in the table | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | $7,988.07 | To find the PV of a lump sum, we use:
PV = FV / (1 + r)^{t}
<ans_image_4>
PV = $590,710 / (1.18)^{26} = $7,988.07 | easy | open question | corporate finance | english | 381 | 4 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,078 | english_382_1_r1 | <image_1> | Solve for the unknown interest rate for the first row in the table. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | .0927, or 9.27% | To answer this question, we can use either the FV or the PV formula. Both will give the same answer since they are the inverse of each other. We will use the FV formula, that is:
FV = PV(1 + r)^{t}
Solving for r, we get:
r = (FV / PV)^{1/t} – 1
<ans_image_1>
FV = $345 = $242(1 + r)^{4};
r = ($345 / $242)^{1/4} –... | easy | open question | corporate finance | english | 382 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | release_basic | |||||
1,079 | english_382_2_r1 | nan | Solve for the unknown interest rate for the second row in the table. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | .1074, or 10.74% | To answer this question, we can use either the FV or the PV formula. Both will give the same answer since they are the inverse of each other. We will use the FV formula, that is:
FV = PV(1 + r)^{t}
Solving for r, we get:
r = (FV / PV)^{1/t} – 1
<ans_image_2>
FV = $927 = $410(1 + r)^{8};
r = ($927 / $410)^{1/8} –... | easy | open question | corporate finance | english | 382 | 2 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,080 | english_382_3_r1 | nan | Solve for the unknown interest rate for the third row in the table. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | .0698, or 6.98% | To answer this question, we can use either the FV or the PV formula. Both will give the same answer since they are the inverse of each other. We will use the FV formula, that is:
FV = PV(1 + r)^{t}
Solving for r, we get:
r = (FV / PV)^{1/t} – 1
<ans_image_3>
FV = $152,184 = $51,700(1 + r)^{16};
r = ($152,184 / ... | easy | open question | corporate finance | english | 382 | 3 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,081 | english_382_4_r1 | nan | Solve for the unknown interest rate for the fourth row in the table. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | .1324, or 13.24% | To answer this question, we can use either the FV or the PV formula. Both will give the same answer since they are the inverse of each other. We will use the FV formula, that is:
FV = PV(1 + r)^{t}
Solving for r, we get:
r = (FV / PV)^{1/t} – 1
<ans_image_1>
FV = $538,600 = $18,750(1 + r)^{27};
r = ($538,600 / $... | easy | open question | corporate finance | english | 382 | 4 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,082 | english_383_1_r1 | <image_1> | Solve for the unknown number of years for the first row in the table. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | 10.64 years | To answer this question, we can use either the FV or the PV formula. Both will give the same answer since they are the inverse of each other. We will use the FV formula, that is:
FV = PV(1 + r)^{t}
Solving for t, we get:
t = ln(FV / PV) / ln(1 + r)
<ans_image_1>
FV = $1,284 = $625(1.07)^{t};
t = ln($1,284 / $625... | easy | open question | corporate finance | english | 383 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | release_basic | |||||
1,083 | english_383_2_r1 | nan | Solve for the unknown number of years for the second row in the table. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | 14.81 years | To answer this question, we can use either the FV or the PV formula. Both will give the same answer since they are the inverse of each other. We will use the FV formula, that is:
FV = PV(1 + r)^{t}
Solving for t, we get:
t = ln(FV / PV) / ln(1 + r)
<ans_image_2>
FV = $4,341 = $810(1.112)^{t};
t = ln($4,341 / $81... | easy | open question | corporate finance | english | 383 | 2 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,084 | english_383_3_r1 | nan | Solve for the unknown number of years for the third row in the table. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | 20.35 years | To answer this question, we can use either the FV or the PV formula. Both will give the same answer since they are the inverse of each other. We will use the FV formula, that is:
FV = PV(1 + r)^{t}
Solving for t, we get:
t = ln(FV / PV) / ln(1 + r)
<ans_image_3>
FV = $402,662 = $16,500(1.17)^{t};
t = ln($402,662... | easy | open question | corporate finance | english | 383 | 3 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,085 | english_383_4_r1 | nan | Solve for the unknown number of years for the fourth row in the table. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | 25.01 years | To answer this question, we can use either the FV or the PV formula. Both will give the same answer since they are the inverse of each other. We will use the FV formula, that is:
FV = PV(1 + r)^{t}
Solving for t, we get:
t = ln(FV / PV) / ln(1 + r)
<ans_image_4>
FV = $147,350 = $21,500(1.08)^{t};
t = ln($147,350... | easy | open question | corporate finance | english | 383 | 4 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,086 | english_384_1_r1 | Wilkinson Co. has identified an investment
project with the following cash flows.
<image_1> | If the discount rate is 10 percent, what is the
present value of these cash flows? | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | $3,125.96 | The time line is:
<ans_image_1>
To solve this problem, we must find the PV of each cash flow and add them. To find the PV of a lump sum, we use:
PV = FV / (1 + r)^{t}
PV@10% = $675 / 1.10 + $880 / 1.10^{2} + $985 / 1.10^{3} + $1,530 / 1.10^{4} = $3,125.96 | easy | open question | corporate finance | english | 384 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | ||
1,087 | english_384_2_r1 | nan | What is the present value at 18 percent? | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | $2,592.69 | The time line is:
<ans_image_1>
To solve this problem, we must find the PV of each cash flow and add them. To find the PV of a lump sum, we use:
PV = FV / (1 + r)^{t}
PV@18% = $675 / 1.18 + $880 / 1.18^{2} + $985 / 1.18^{3} + $1,530 / 1.18^{4} = $2,592.69 | easy | open question | corporate finance | english | 384 | 2 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,088 | english_384_3_r1 | nan | What is the present value at 24 percent? | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | $2,280.44 | The time line is:
<ans_image_1>
To solve this problem, we must find the PV of each cash flow and add them. To find the PV of a lump sum, we use:
PV = FV / (1 + r)^{t}
PV@24% = $675 / 1.24 + $880 / 1.24^{2} + $985 / 1.24^{3} + $1,530 / 1.24^{4} = $2,280.44 | easy | open question | corporate finance | english | 384 | 3 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,089 | english_385_1_r1 | <image_1> | Find the EAR for the first row in the table. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | .0687, or 6.87% | For discrete compounding, to find the EAR, we use the equation:
EAR = [1 + (APR / m)]^{m} – 1
EAR = [1 + (.067 / 4)]^{4} – 1 = .0687, or 6.87% | easy | open question | corporate finance | english | 385 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |
1,090 | english_385_2_r1 | nan | Find the EAR for the second row in the table. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | .1313, or 13.13% | For discrete compounding, to find the EAR, we use the equation:
EAR = [1 + (APR / m)]^{m} – 1
EAR = [1 + (.124 / 12)]^{12} – 1 = .1313, or 13.13% | easy | open question | corporate finance | english | 385 | 2 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,091 | english_385_3_r1 | nan | Find the EAR for the third row in the table. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | .1029, or 10.29% | For discrete compounding, to find the EAR, we use the equation:
EAR = [1 + (APR / m)]^{m} – 1
EAR = [1 + (.098 / 365)]^{365} – 1 = .1029, or 10.29% | easy | open question | corporate finance | english | 385 | 3 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,092 | english_385_4_r1 | nan | Find the EAR for the fourth row in the table. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | .0876, or 8.76% | To find the EAR with continuous compounding, we use the equation:
EAR = e^{r} – 1
EAR = e^{.084} – 1 = .0876, or 8.76% | easy | open question | corporate finance | english | 385 | 4 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,093 | english_386_1_r1 | <image_1> | Find the APR for the first row in the table. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | .0871, or 8.71% | Here, we are given the EAR and need to find the APR. Using the equation for discrete compounding:
EAR = [1 + (APR / m)]^{m} – 1
We can now solve for the APR. Doing so, we get:
APR = m[(1 + EAR)^{1/m} – 1]
EAR = .0890 = [1 + (APR / 2)]^{2} – 1
APR = 2[(1.0890)^{1/2} – 1] = .0871, or 8.71% | easy | open question | corporate finance | english | 386 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |
1,094 | english_386_2_r1 | nan | Find the APR for the second row in the table. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | .1735, or 17.35% | Here, we are given the EAR and need to find the APR. Using the equation for discrete compounding:
EAR = [1 + (APR / m)]^{m} – 1
We can now solve for the APR. Doing so, we get:
APR = m[(1 + EAR)^{1/m} – 1]
EAR = .1880 = [1 + (APR / 12)]^{12} – 1
APR = 12[(1.1880)^{1/12} – 1] = .1735, or 17.35% | easy | open question | corporate finance | english | 386 | 2 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,095 | english_386_3_r1 | nan | Find the APR for the third row in the table. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | .0990, or 9.90% | Here, we are given the EAR and need to find the APR. Using the equation for discrete compounding:
EAR = [1 + (APR / m)]^{m} – 1
We can now solve for the APR. Doing so, we get:
APR = m[(1 + EAR)^{1/m} – 1]
EAR = .1040 = [1 + (APR / 52)]^{52} – 1
APR = 52[(1.1040)^{1/52} – 1] = .0990, or 9.90% | easy | open question | corporate finance | english | 386 | 3 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,096 | english_386_4_r1 | nan | Find the APR for the fourth row in the table. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | .1275, or 12.75% | Solving the continuous compounding EAR equation:
EAR = e^{r} – 1
We get:
APR = ln(1 + EAR)
APR = ln(1 + .1360)
APR = .1275, or 12.75% | easy | open question | corporate finance | english | 386 | 4 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
1,097 | english_387_1_r1 | The present value of the following cash flow stream is $7,300 when discounted at 7.1 percent annually.
<image_1> | What is the value of the missing cash flow? | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | $1,717.65 | The time line is:
<ans_image_1>
We are given the total PV of all four cash flows. If we find the PV of the three cash flows we know, and subtract them from the total PV, the amount left over must be the PV of the missing cash flow. So, the PV of the cash flows we know are:
PV of Year 1 CF: $1,500 / 1.071 = $1,400.56... | medium | open question | corporate finance | english | 387 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | ||
1,098 | english_388_1_r1 | An All-Pro defensive lineman is in contract negotiations.
The team has offered the following salary structure:
<image_1>
All salaries are to be paid in a lump sum. The player has asked you as his agent to renegotiate the terms. He wants a $10 million signing bonus payable today and a contract value increase of $2,7... | If the interest rate is 5.7 percent compounded daily, what is the amount of his quarterly check? Assume 365 days in a year. | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | $1,390,909.66 | To find the quarterly salary for the player, we first need to find the PV of the current contract. The cash flows for the contract are annual, and we are given a daily interest rate. We need to find the EAR so the interest compounding is the same as the timing of the cash flows. The EAR is:
EAR = [1 + (.057/365)]^{365... | hard | open question | corporate finance | english | 388 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |
1,099 | english_389_1_r1 | Maxwell Software, Inc., has the following
mutually exclusive projects.
<image_1> | Suppose the company’s payback period cutoff is two years. Which of these two projects should be chosen? | null | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | Project A | The payback period is the time that it takes for the cumulative undiscounted cash inflows to equal the initial investment.
Project A:
Cumulative cash flows Year 1 = $13,200 = $13,200
Cumulative cash flows Year 2 = $13,200 + 8,300 = $21,500
Companies can calculate a more precise value using fractional years. To cal... | medium | open question | corporate finance | english | 389 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
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