Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
1. Consider a 3-yr corporate bond paying a coupon of 7% per year payable semi-annually and has a yield of 5% (expressed with semi-annual compounding). Assume the yield for all maturities on risk-free bonds is 4% per annum. Assume that default can take place every 6 months immediately before a coupon payment. Also assume that the recovery rate is 45%. Estimate the default probabilities assuming that the unconditional default probabilities are the same on each possible default date..
2.
The following is the balance sheet of a DI (millions)
ASSETS
Liabilities & Equity
CASH
$2
Demand deposits
$50
LOANS
50
Equity
5
Primeses and Equipment
3
TOTAL
55
Total
The asset-liability management committee has estimated that the loans, whose average interest rate is
6 percent and whose average life is three years, will have to be discounted at 10 percent if they are to
be sold in less than two days. If they can be sold in four days, they will have to be discounted at 8 percent.
If they can be sold later than a week, the DI will receive the full market value. Loans are not amortized; that is,
the principal is paid at maturity.
A) What will be the price received by the DI for the loans if they have to be sold in two days? In four days?
B) In a crisis, if depositors all demand payment on the first day, what amount will they receive? What will
they receive if they demand to be paid within the week? Assume no demand issurance
If the yield on 3-year Treasury bonds equals the 1-year yield plus 2.25%, what inflation rate is expected after Year 1? Round your answer to two decimal places.
Property insurance on the building is $9,000 per year and will not change because of the new activity. How much of the insurance premium should be allocated to the new product line?
The fourth step in the reengineering process is to understand the current process. Which of the following are the key resources for this step?
A Corporation stock is selling for $78. The next annual dividend is expected to be 2.70. The growth rate is 9 percent. The flotation cost is 5.00.
Beta Corp has an ROE of 15%; has just paid a dividend of $1.50; and pays 10% of its earnings out in dividends, and the appropriate discount rate is 20%; what is the current stock price?
If stock sells for $39 per share, Determine your best evaluate of company’s cost of equity? Answer in a %.
The value of an asset is present value of the expected returns from asset during the holding period. An investment will provide a stream of returns during this period,
He would like to set aside an equal amount at the end of each year in order to accumulate the amount needed. He can earn 9% annual return. How much should he set aside?
Briefly discuss Present Value and CAPM to your professional discipline.
Bond X is a premium bond making annual payments. The bond has a coupon rate of 9.8 percent, a YTM of 7.8 percent, and has 15 years to maturity. Bond Y is a discount bond making annual payments.
At the starting of 2006, Findlay Company received a three-year zero-interest-bearing $1,000 trade note. The market rate for equivalent notes was 8 percent at that time
Robert Blanding's employer offers its workers a two-month paid sabbatical every seven years. Assume Robert increases his annual contribution to $3,150. How large will his account balance be in seven years?
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd