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!
A manager has a $50 million portfolio that consists of 50% stock and 50% bonds (i.e., $25 million each) - The beta of the stock position is 0.8. - The modified duration of the bond position is 6.8 The manager wishes to achieve an effective mix of 60% stock (i.e., $30 million) and 40% bonds. Since the move is only temporary, and rather than having to decide which bonds to sell and which stocks to buy to achieve the desired mix, the manager will use futures contracts. - The price of the stock index futures contract is $300,000 (including the multiplier), and its beta is 1.1. - The price and modified duration of the bond futures contracts are $102,000 and 8.1 respectively.
a. How many stock index futures do you need to use? Should you short or long the stock index futures?
b. How many bond futures do you need to use? Should you short or long the bond index futures?
Kinkead Inc. forecasts that its free cash flow in the coming year, i.e., at t = 1, will be -$10 million, but its FCF at t = 2 will be $20 million. After Year 2, FCF is expected to grow at a constant rate of 4% forever. If the weighted average cost of..
If the CEO of a large firm were filling out a performance report on a division manager, which of the following situations would be likely to cause the manager to receive a better grade?
An investor enters into a short futures position in 10 contracts in gold at a futures price of $276.50 per oz. The size of one futures contract is 100 oz. The initial margin per contract is $1,500 and the maintenance margin is $1,100 per contract. Wh..
Cost of Capital. Blues, Inc., is an MNC located in the United States. Blues would like to estimate its weighted average cost of capital. On average, bonds issued by Blues yield 9%. Currently, Treasury security rates are 3%. Furthermore, Blues' stock ..
The development of XBRL has allowed businesses to communicate the content of financial data in a more efficient manner.
What was the last price of the bond in $. - Calculate annual coupon interest payments. - Calculate current yield of the bond.
An investor wants to form a two asset portfolio consisting of Treasury bills with a return of 1.5% and a risky portfolio with a risk premium of 12.7% and a standard deviation of 22%. The investor wants the standard deviation of the two asset portfoli..
A bicycle manufacturer currently produces 223,000 units a year and expects output levels to remain steady in the future. It buys chains from an outside supplier at a price of $2.20 a chain. If the company pays tax at a rate of 35% and the opportunity..
Ward Corp. is expected to have an EBIT of $2,550,000 next year. What is the price per share of the company's stock?
Blue Bull, Inc., has a target debt-equity ratio of .84. Its WACC is 8.8 percent, and the tax rate is 40 percent. If the aftertax cost of debt is 5 percent, what is the cost of equity? If the company’s cost of equity is 12.4 percent, what is its preta..
Proplan shares are currently selling at $69.25 each. What is the WACC for Proplan?
Assess the credibility of the behavioral critique of the efficient market hypostasis. Provide support for your rationale. Examine the results of technical analysis, and determine whether or not it works. Support your answer.
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