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!
Question: Suppose a borrower knows at time t = 0 that it will have available at time t = 1 an opportunity to invest $340 in a risky project that will pay off at time t = 2. The borrower knows that it will be able to invest in one of two mutually exclusive projects, S or R, each requiring a $340 investment. If the borrower invests in S at time t = 1, the project will yield a gross payoff of $615 with a probability of 0.8 and $180 with a probability of 0.2 at time t = 2. If the borrower invests in R at time t = 1, the project will yield a gross payoff of $685 with a probability of 0.6 and $100 with a probability of 0.4 at time t = 2. The borrower's project choice is not observable to the bank.
The riskless, single-period interest rate at time t = 0 is 3%. It is not known at time t = 0 what the riskless, single-period interest rate at time t = 1 will be, but it is common knowledge that this rate will be 4% (with probability 0.65) or 10% (with probability 0.35). Assume universal risk neutrality and that the borrower has no assets than the project on which you (as the lender) can have a claim.
Suppose you are this borrower's bank, and both you and the borrower recognize that this borrower has two choices: (1) it can do nothing at time t = 0 and simply borrow at the spot market at the interest rate prevailing for it at time t = 1, or (2) it can negotiate at time t = 0 with you (or some other bank) for a loan commitment that will permit it to borrow at predetermined terms at time t = 1.
What advice should you give this borrower? Assume a competitive loan market in which each bank is constrained to earn zero expected profit. Determine the NPV of the alternative(s) that you recommend.
With a restricted policy, current assets will be 15% of sales, whileunder a relaxed policy they will be 25% of sales. What is the difference in the projectedROEs between the restricted and relaxed policies?
A mutual fund portfolio currently is worth $ 800 million. During the year, the fund sells stocks worth of 200 million and realizes the long term capital gains.
Develop a 95% confidence interval for the proportion opposing health care changes. Comment on the result.
Financial crises happen in various parts of the world.
Calculate the CAPM for a company and write a report on it. The chosen company is Fidelity National Information Services (FIS) listed on the NYSE.
Flash Gordon Memory (FGM) sells memory cards for $45 each. Fixed costs are $900,000 for output up to 200,000 cards. Variable costs are $25 per card.
Stock was issued several years agao and carried a fixed dividend of $6 per share. Over time, the yields have gone from 6 percent to 14 percent
Suppose you pay $9,800 for a $10,000 par Treasury bill maturing in 2 months. What is the annual percentage rate of return for this investment?
The commercial banks in Econoland have Reserves $1,000 million Loans $7,000 million Deposits $8,000 million Total assets $10,000 million.
The new machine will be depreciated at 11.8% percent using the diminishing value method. What is the depreciation in year 2?
Annual fixed costs are $519,752 and the variable costs are $.71 cents per unit. The following equations will be useful.
Describe the types of resources (assets) needed for a new product venture during its development and startup stages. Comment on the likely revenues and expenses during these early life cycle stages.
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