Determine the bond equivalent yield

Reference no: EM1373586

[A] In order for you to be indifferent between the after tax returns on a corporate bond paying 8.5 percent and a tax-exempt municipal bond paying 6.12 percent, what would your tax bracket need to be?

[B] Determine the bond equivalent yield of a T-Bill that is selling for $9,453 and has 173 days remaining until maturity?

2) You bought one hundred shares of ABC common stock on margin at $70 per share. Assume the initial margin is 50% and the maintenance margin is 30%. Below what stock price level would you get a margin call? Assume the stock pays no dividend; ignore interest on margin.

3) Discuss the consistency of mutual fund performance results, as studied by Goetzmann and lbbotson (1994) and Malkiel (1995).

4) You have been given this probability distribution for the holding period return for XYZ stock:

State of the Economy Probability HPR

Boom .30 18%
Normal growth .50 12%
Recession .20 -5%

Requirement: Calculate the expected returns and standard deviation for XYZ stock.
Prob HPR(%) Prob×HPR HPR-Exp.Ret (HPR-Exp.Ret)2 Prob×(HPR-Exp.Ret)2
0.30 18 5.4 7.6 57.76 17.328
0.50 12 6.0 1.6 2.56 1.28
0.20 -5 -1.0 .-15.4 237.16 47.432
Exp. Ret. = 10.4% Variance = 66.04
Std. Dev.= 8.13

Reference no: EM1373586

Questions Cloud

Appraisal the portion of web chapter a concerning new : Appraisal the portion of Web Chapter A concerning new product innovation. Then choice a new product that you have been introduced to in the past 12 months.

All organizations have conflict as well as that conflict : All organizations have conflict as well as that conflict can be either functional or dysfunctional. Interactive within an organization is an extremely important,

We are concentrating on fallacies : We are concentrating on fallacies, psychology and other rhetorical devices in this module. Start the conversation by finding an instance of a fallacious argument that uses psychological tactics to persuade the audience.

What catches your helpfulness about the graphic : What catches your helpfulness about the graphic? Seeing your home state, what are few factors in its economic, political and cultural realms?

Determine the bond equivalent yield : In order for you to be indifferent between the after tax returns on a corporate bond paying 8.5 percent and a tax-exempt municipal bond paying 6.12 percent,

Stuck on certain international business : I'm stuck on certain International business questions. Question- Which of the subsequent most strongly suggests OTC should not export its towels to Earth Waves?

Analyze organizational processes as well as procedures : Analyze organizational processes as well as procedures in a variety of business settings. For the second part, presume that you are either using offshore manufacturing or have outsourced services to another country.

Estimate the demand for new products : How does your company or management go about estimating its sales? How does it determine the demand for new products so that it can make a production run?

The public comment period closes on an osha proposed : The public comment period closes on an OSHA proposed regulation and your business had filed a public comment against the proposed regulation illumination that the regulation would not fix the problem

User Account

All Pages