Problem related to the financial analysis techniques

Reference no: EM13788885

Use the following information for Questions 1 and 2:

Assume that you are nearing graduation and have applied for a job with a local bank. The bank's evaluation process requires you to take an examination that covers several financial analysis techniques. The first section of the test asks you to address these discounted cash flow analysis problems:

1. What is the present value of the following uneven cash flow stream -$50, $100, $75, and $50 at the end of Years 0 through 3? The appropriate interest rate is 10%, compounded annually.

2. Suppose that on January 1 you deposit $100 in an account that pays a nominal (or quoted) interest rate of 11.33463%, with interest added (compounded) daily. How much will you have in your account on October 1, or 9 months later?

Use the following information for Questions 3 and 4:

A firm issues a 10-year, $1,000 par value bond with a 10% annual coupon and a required rate of return is 10%.

3. What is the yield to maturity on a 10-year, 9% annual coupon, $1,000 par value bond that sells for $887.00? That sells for $1,134.20? What does a bond selling at a discount or at a premium tell you about the relationship between rd and the bond's coupon rate?

4. What are the total return, the current yield, and the capital gains yield for the discount bond in Question #8 at $887.00? At $1,134.20? (Assume the bond is held to maturity and the company does not default on the bond.)

Reference no: EM13788885

Questions Cloud

Is stock price maximization good or bad for society : Do you belive that corporations have any responsibilities to society at large? Is stock price maximization good or bad for society? elaborate on why firms should behave ethically. Define "ethically."

What is the maximum monthly contribution margin : Todd Corporation produces two products, P and Q. P sells for $5 per unit; Q sells for $6.50 per unit. Variable costs for P and Q are respectively, $3 and $4.50. There are 4,300 direct labor hours per month available for producing the two products.

Improvments in efficiency and customer service : How teams are used in other industries, such as aviation, auto racing, and the military

Create a mock-up interface for the project : Create your first mock-up of this interface - Based off of your previously chosen organization, you will now begin the design.

Problem related to the financial analysis techniques : Assume that you are nearing graduation and have applied for a job with a local bank. The bank's evaluation process requires you to take an examination that covers several financial analysis techniques. The first section of the test asks you to add..

Preparing a companys financial statements : Who is responsible for preparing a company’s financial statements?

Explain what claims might liam and mike have against mary : Mary tells Liam and Mike that she will give them $2,500 if they paint her house. Mary's statements are overheard by Jane, Mary's neighbor. What claims might Liam and Mike have against Mary

Assignment on shedd aquarium makeup : SHEDD AQUARIUM MAKEUP

Write a research paper about space and spacecraft technology : Write a Research Paper about Space and spacecraft technology.

User Account

All Pages