Friday, February 22, 2019

Cheat Sheet Finance Essay

One year ago, you purchased 1,200 sh bes of Berry, Mayell, and Wheeler (BMW) strain for $21.20 per share. You have sure dividend payments equal to $0.60 per share. Today, you sold all of your shares for $22.20 per share. What is your total harvest-festival (dollar and percent) on this enthronization? (4 points) picCastella, Norwood, and Ngoc (CNN) stock had returns of 8%, -2%, 4%, and 16% over the ago quaternion years. What are the mean and standard deviation of this stock for the past quadruple years? (6 points)The long term inflation rate average was 3.2% and you invested in long term corporate bonds over the same period which acquire 6.1%. What was the average risk agio you earned? (3 points)pic Use the following nurture to answer questions 11 and 12. You purchased one of Fan, Igli, Sherrill, Harper, Evans, and Rashid (FISHER) Corps 8% coupon bonds one year ago for $1,028.50. These bonds make annual payments and mature six-spot years for now. Suppose you decide to sell your bond today, when the required return on the bond is 7%. The inflation rate was 4.8% over the past year. What would be your total (i.e., nominal) rate of return on the investment? (7 points) To chance the return on the coupon bond, you first pick out to find the bell today. The bond now has six years to maturity, so the price today is pic You received the coupon payments on the bond, so the nominal return was pic What would be your real rate of return on the investment? (4 points)And using the pekan equation to find the real return, we get pic Return and Risk Statistics and CAPM (various points each) If the covariance of Carolean and Oberkrom (CO) Inc. stock with Van, Aleksandra, and Richter (VAR) Co. stock is0.0065, then what is the covariance of VAR Co. stock with CO Inc. stock? (3 points) Answer -0.0065 Suppose the risk-free rate is 6.3% and the market risk premium is 8.5%. The market portfolio has a variance of 0.0498. Blagg, Elizabeth, Tendler, and April (BETA) Portf olio has a correlation coefficient with the market of 0.45 and a variance of 0.1783. According to the CAPM, what is the expected return on BETA Portfolio? (8 points)First, you need to find the standard deviation of the market and the portfolio, which are pic pic Now, you can function the equation for beta to find the beta of the portfolio, which ispic or pic pic pic Assume that you are interested in acquiring the pocket rights to market a fresh product. You estimate that it will cost you $500 million upfront. You also consider that the product will generate an NPV of -$165. You expect to operate without serious competitor for the next five years. Use the following inputs to the Black-Scholes options pricing model S, the sure PV of the projects E(CFs)$335 million 2, the variance of the projects E(CFs)0.422 = 0.1764 X, the initial investment in the project$500 millionT, the period of exclusive rights to the project5 yearst, the number of years balked1 5 yearsrf, the 5-year risk- free rate5%DY, the cost to delay pic0.20

No comments:

Post a Comment