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1. A pension plan will have a cash outflow in 3 years. They can invest in 2 year bonds with a duration of 1.7 years and 4 year bonds with a duration of 3.5 years. To immunize the portfolio, the proportion invested in the 4 year bonds should be
A) 0.44
B) 0.28
C) 0.50
D) 0.72
Please show all work and steps
2. You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner (leasing is a very common practice with expensive, high-tech equipment). The scanner costs $6,900,000, and it would be depreciated straight-line to zero over four years. Because of radiation contamination, it will actually be completely valueless in four years. You can lease it for $1,935,000 per year for four years. Assume that the tax rate is 35 percent. You can borrow at 10 percent before taxes.
Calculate the NAL. (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
NAL $
Davis Industries must choose between a gas-powered and an electric-powered forklift truck for moving materials in its factory.
Logan and Johnathan exchange land, and the exchange qualifies as like kind under § 1031. Because Logan's land (adjusted basis of $85,000) is worth $100,000 and Johnathan's land has a fair market value of $80,000, Johnathan also gives Logan cash of $2..
Discuss what data/variables need to be collected to test the following hypotheses. Higher education is correlated with higher family income
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Your portfolio allocates equal funds to the DW Co. and Woodpecker, Inc. DW Co. stock has an annual return mean and standard deviation of 13 percent and 42 percent, respectively. Woodpecker, Inc., stock has an annual return mean and standard deviation..
Determine the engineering economy symbols and their corresponding value. What is the annual worth of the company.
Calculate the after-tax return this investor will earn if she sells GMC stock at the current $54 stock price prior to the ex-dividend date.
What is the price of the option if it is a European call? - What is the price of the option if it is a European put? - Verify that put-call parity holds.
Prepare the firm’s pro forma balance sheet for next year. Calculate the external financing needed.
How much money did Mr. Jefferson contribute to the fund assuming that only the interest income is distributed?
Common stock is generally considered to be a more risky asset class than corporate bonds because:
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