If two loans have same annual percentage rates

Assignment Help Financial Management
Reference no: EM132003311

1. If two loans have same annual percentage rates then:

a. the loan must have the same effctive annual rate.

b. both loan must charge intrest using the same peroid of time

c. a borrow shaould have no prefrence over which loan is selected

d. the laon which chargs intrest the most frequently must have the higher stated rate.

e. the borrower might still save money by selecting one loan over the other

2. Stock Y has a beta of 1.5 and an expected return of 17.1 percent. Stock Z has a beta of 0.95 and an expected return of 13.4 percent. Required: If the risk-free rate is 5.45 percent and the market risk premium is 7.95 percent, are these stocks correctly priced?

Reference no: EM132003311

Questions Cloud

Considering two injection molding processes : A plastics company is considering two (mutually exclusive) injection molding processes.
What is value of abandonment option : Sunshine Smoothies Company (SSC) manufactures and distributes smoothies. What is the value of the abandonment option (in millions)?
Shares of common stock outstanding : If Sims has 35 million shares of common stock outstanding, what is the stock's value per share?
What is the project net present value : If the company chooses to drill today, what is the project’s net present value?
If two loans have same annual percentage rates : If two loans have same annual percentage rates then:
What is the interest rate and what is the volatility : Compute the expectation and the variance of W1/2 + W1. What is the interest rate? What is the volatility?
What is the value of this preferred stock : If your required rate of return is 8.25%, what is the value of this preferred stock?
Planning to make annual deposits : You are planning to make annual deposits of $6,570 into a retirement account that pays 8 percent interest compounded monthly.
What stock price is expected one year from now : The dividend is expected to grow at a constant rate of 6% a year. What stock price is expected one year from now?

Reviews

Write a Review

Financial Management Questions & Answers

  What is the net profit or loss on this investment

You sold two call option contracts (each on 100 shares) with a strike price of $30 when the option was quoted at $.70. The option expires today when the value of the underlying stock is $28.80. Ignoring trading costs and taxes, what is the net profit..

  Calculate the total interest and fees casey one stop

Calculate the total interest and fees Casey’s One Stop can expect to pay on this loan commitment.

  What is the profitability index for each project

What is the payback period for each project? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) Payback period Project A years Project B years. What is the profitability index for each project? What is the..

  Find the firm''s free cash flow and calculate the liquidity

determine the firm's free cash flow and calculate the liquidity, activity, debt, profitability, and market ratios for Jaedan industries. Perform a DuPont analysis and compare the firm to the industry ratios (see last table in this sequence). Highl..

  Budget in order to take action for the future

Why is important to understand the mistakes made in a budget in order to take action for the future?

  What is portfolio risk of stock-bond portfolio in percent

What is the portfolio risk of a 60/40 stock/bond portfolio in percent?

  Evaluate sharpe''s beta coefficient

Evaluate Sharpes Beta Coefficient,  Evaluate the Beta Coefficient for Stock X and Stock Y using both regression and the formula given in your text. Highlight your answers in red.

  What is the expected return on equity before the swap

Suppose the risk free rate is 2.5%, and the expected return on the market is 9%. What is the expected return on equity before the swap?

  What is your best estimate of the company cost of equity

If the stock sells for $36 per share, what is your best estimate of the company’s cost of equity?

  Would hopkins prefer a put option hedge or no hedge

Would Hopkins prefer a put option hedge or no hedge?

  What is the companys current stock price

The Isberg Company just paid a dividend of $0.75 per share, and that dividend is expected to grow at a constant rate of 5.50% per year in the future.

  How much was in their ira at age 60

If the average return on their investment was 8%, how much was in their IRA at age 60? What was their total investment?

Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd