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You have commenced work as a certified Financial Planner. Your supervisor has provided the following financial data for a new client Brant Jerome. The client turned 34 years old today and plans to retire when she turns 67. The client owns a diversified share portfolio which is valued today at $47,000. It is expected that this portfolio will earn (on average) 7% per annum indefinitely. Brant also has a superannuation account with a balance of $78,000 to which he currently contributes $1,000 per month. The superannuation account is expected to continue to earn 8% per annum. At his retirement your client plans to consolidate his financial holdings and purchase a monthly annuity as a pension to fund his planned lifestyle. Brant believes he will need to self-fund his retirement until he reaches the age of 85 at which time he would like to have $120,000 remaining to fund any costs not covered by the age pension. During the pension phase of his retirement Brant will adopt a Balanced investment strategy which will return 5% pa (compounded monthly) on his annuity investment.
(i) What will be the value of Brant's financial assets when he retires at age 67? Present all calculations to support your answer.
(ii) What will be the monthly pension amount that Brant will receive on his retirement? Present all calculations to support your answer.
Marian Plunket owns her own business and is considering an investment. If she undertakes the? investment, it will pay $40,000.
The stock price of ABC-Corp is currently S0 = $50. What is the price of a European call option which expires in 2 months and which has a exercise price of $60?
A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return is rs = 10.5%, and the expected constant growth rate is g = 6.4%.
Return on Stock Options. Chris purchased a call option on a stock for $200. The option gives him the right to purchase the stock at $30 per share until May 1st. On May 1st, the price of the stock is $28 per share. What is Chris' return on the stoc..
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Briefly explains the cash flow promised by each bond to the investor. Briefly explains a call option, and when it is likely to occur for each bond.
After reading "The Dangerous Morality of Managing Earnings" write an essay that includes the following elements:
1-assuming that a one-year call option with an exercise price of 38 is available for the stock of the dew corp.
Let the expected returns of A and B be equal to .09 and ErB, respectively. Also, suppose that the standard deviations are σA =.04 and σB =.10, and the two securities are perfectly positively correlated. Find ErB if the return of a riskless portfolio ..
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The probability of a boom is 73 percent while the probability of a recession is 27 percent. What is the variance of the returns on RTF, Inc. stock?
Prepare a report analyzingone stock
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