Reference no: EM131050939
1. How do you measure return?
2. What is standard deviation of a variable? What is correlation coefficient between two variables?
3. What is risk and return trade off? What is risk and return dominance?
4. What is diversification? How does portfolio risk relate to the number of assets in the portfolio?
5. How do you measure the risk of a stock that cannot be diversified away? How do you measure beta of a stock?
6. How do you determine the risk premium of a stock based on its beta? How do you determine the required rate of return of a stock?
7. How do you determine the value of a stock?
8. How do you determine whether a stock is overpriced, underpriced or fairly priced?
9. How do you determine the required rate of return of a bond? How do you determine the price or value of a bond?
10. How do fluctuations of interest rates affect bond prices?
11. Why are long-term bonds more risky than short-term bonds?
12. What is the relationship between the risk, return and value of a bond or a stock or any financial asset?
13. What is cost of debt?
14. What is the cost of equity?
15. What is the weighted average cost of capital? What is the market value weight?
16. What is internal rate of return? How is internal rate of return used in making investment decisions?
17. What is net present value? How is net present value used in investment decisions?
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Moneys supply at the desirable level
: The U.S. Treasury maintains accounts at commercial banks. What would be the consequences if the Treasury shifted funds form those banks to the Fed? What would be the appropriate response by the Fed to keep the moneys supply at the desirable level?
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Generally increase the after tax cost of debt
: Which of the following will generally increase the after tax cost of debt? a. a firm’s bond rating increases b. the market rate of interest increases c. tax rates decrease d. bond prices rise
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What is the company pre-tax cost of debt
: The Fix-it Shop has zero coupon bonds outstanding that mature in three years. The bonds have a face value of $1,000 and a current market price of $860. What is the company’s pre-tax cost of debt?
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Annuity for another annuity of equivalent present value
: You have an annuity which pays $1,200 every two years. The first payment is two years from now and the last payment is ten years from now. You can trade that annuity for another annuity of equivalent present value, which pays $180 per quarter startin..
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What is correlation coefficient between two variables
: What is standard deviation of a variable? What is correlation coefficient between two variables? What is risk and return trade off? What is risk and return dominance? How do you determine the risk premium of a stock based on its beta? How do you dete..
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Organizations that are exposed to high leverage
: Organizations that are exposed to high leverage will probably act aggressively to cover their large fixed costs. Can someone give an example of an organization that has recently done this and explain why they do this in the first place?
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Determine the bonds yield-to-maturity
: BCC has issued 8? percent debentures that will mature on July 15, 2034. Assume that interest is paid and compounded annually. If an investor purchased a $1,000 denomination bond for $1,025 on July 15, 2014, determine the bond’s yield-to-maturity. Exp..
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Consider the asset and liability structures
: Consider the following asset and liability structures: Asset: $10 million in a one-year, fixed-rate commercial loan $5 million in a 6 month Treasury bill. Liability: $10 million in a three-month CD $5 million in a 6 month CD. Calculate each bank’s th..
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Determine the yield-to-maturity-denomination bond
: Adams Food Service has issued 7? percent bonds that mature on July 15, 2046. The bonds are callable at $1,037.08 on July 15, 2021. Assume that interest is paid and compounded annually. Determine the yield-to-maturity (to the nearest 10th of 1 percent..
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