Midterm Practice
31 Pages

Midterm Practice

Course Number: FIN 325, Fall 2010

College/University: Washington State

Word Count: 5535

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Chapter 1 Midterm Study Guide Question 1 What is working capital management? deciding which real assets to invest in managing curent assets and current liabilities deciding which long term financial assets to invest in deciding how much debt and equity to use to finance the Question 2 The major financial decisions are: I. Capital budgeting, II. Financing decision, III. Setting sales price, IV. Working capital...

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1 Chapter Midterm Study Guide Question 1 What is working capital management? deciding which real assets to invest in managing curent assets and current liabilities deciding which long term financial assets to invest in deciding how much debt and equity to use to finance the Question 2 The major financial decisions are: I. Capital budgeting, II. Financing decision, III. Setting sales price, IV. Working capital policies. I, II, III and IV I, II and IV only I only I and II only Question 3 The three basic forms of business organization discussed in Chapter 1 are _________________. I. proprietorship, II. partnership, III. corporation, IV. municipalities, V. agencies. I, II and III II, III and IV I, III and IV III, IV and V Question 4 Which of the following matters most to investors? A firm's profits. A firm's cash flows. A firm's assets. A firm's debt level Question 5 Profit maximization is not an appropriate goal for a firm because it is difficult to define. it does not directly account for a firm's cash flows. it does not consider the timing and riskiness of the firm's cash flows. All of the above. Question 6 Deciding whether or not to spend $5 million to purchase a new piece of equipment is an example of a working capital decision faced by a financial manager. Fals e True Question 7 Maximization of a firm's profit is more important than maximization of a firm's value. False True Question 8 Correct. The two basic sources of funds for all businesses are debt and equity. Question 9 A business is liquidated and receives $500,000 for its assets. The business has debts of $600,000. If the business was a corporation the stockholders would owe $_______ $_________ and if the business was a partnership the owners would owe . Question 10 Correct. A corporation has taxable income of $100,000 and pays corporate taxes of $34,000. The firm pays $50,000 in dividends to its stockholders. The stockholders then must pay taxes on the dividend income received. This is referred to as double taxation. Question 11 Profit maximization is not the proper goal of the firm because I. Maximizing profits ignores the time value of money, II. Maximizing profits ignores risk, III. Profits are subject to manipulation under accounting rules. I only I, II and III I and II only II and III only Question 12 Correct. The appropriate goal of financial managers is to maximize stock price. Management decisions such as selecting which products or services to produce, deciding which assets to purchase or which ad campaign to use should be evaluated based on their effect on a firm's cash flow. Question 13 The main responsibility of the financial manager is to manage the wealth of shareholders. to keep the firm's debtholders happy. to assist the marketing department in making sales projec to make decisions that are in the best interests of the firm Question 14 The main objective of a firm's management should be to maximize its profits. minimize its risk exposure. reduce its debt level. maximize its stock price. Question 15 Capital budgeting involves determining which productive assets a firm should buy. making decisions about how much debt a firm should have in its capital structure. determining how a firm should finance or pay for its assets. determining how much money should be invested in current assets. Question 16 The most important goal of a financial manager should be to reduce the frm's overall riskiness. False True Question 17 Sound financial decisions are those where the value of benefits exceeds the costs. False True Question 18 A risky dollar is worth more than a safe dollar. False True QUIZ Question 1 Which of the following can help align the behavior of managers with the goals of shareholders? management compensation managerial labor markets an independent board of directors All of the above. * Question 2 Your birthday is coming up and instead of any presents, your parents promised to give you $2,000 in cash. Since you have a part time job and thus don't need the cash immediately, you decide to invest the money in a bank CD that pays 8 percent quarterly for the next two years. How much money will you have at the end of two years? * Question 3 Patrick Seeley has $3,200 that he is looking to invest. His brother approached him with an investment opportunity that could double his money in 5 years. What interest rate would the investment have to yield in order for Patrick's brother to deliver on his promise? Question 4 Which of the following business organizational forms is easiest to raise capital? a) sole proprietorship b) partnership c) corporation d) a and b Question 5 The process of converting future cash flows to what its present value is time value of money. discounting. compounding. None of the above. Question 6 The Rule of 72 can be used to determine the amount of time it takes to double an investment. is fairly accurate for interest rates between 25 and 50 percent. states that the time to double your money (TDM) approximately equals 72/i, where 72 represents the years it takes to double your investment. None of the above describe the Rule of 72. Question 7 Which of the following business organizational forms creates a tax liability on income at the personal income tax rate? a) sole proprietorship b) partnership c) corporation d) a and b * Question 8 Chuck Tomkovick is planning to invest $19,000 today in a mutual fund that will provide a return of 8 percent each year. What will be the value of the investment in ten years? Question 9 Capital budgeting involves how a firm's daytoday matters should be mana how the firm should finance its assets. which productive assets the firm should employ. All of the above. * Question 10 Your aunt is planning to invest in a bank deposit that will pay 7 percent interest semi annually. If she has $6,000.00 to invest, how much will she have at the end of four years? * Question 11 Find the future value in five years of an investment of $100,000 made today that earns 5 percent for the following compounding periods: (Do not enter the $ sign in your answer, round your final answer to the nearest penny.) a. Quarterly $ b. Monthly $ c. Daily $ d. Continuous $ Question 12 Which of the following is a basic source of funds for the firm? a) debt b) equity c) asset liquidations d) a and b above * Question 13 Matt Murton, an outfielder for the Chicago Cubs, is expected to hit 26 home runs this year. If his home run hitting ability is expected to grow by 9 percent every year for the next five years, how many home runs is he expected to hit five years from now? Question 14 Growth rate: Peterson Electrical Supplies has generated a net income of $161,424 this year. The firm expects to see an annual growth of 30 percent for the next five years, followed by a growth rate of 15 percent for each of the next three years. What will be the firm's expected net income in eight years? (Round to the nearest dollar.) $689,2 59 $911,546 $319,157 $241,32 Question 15 A risky dollar is worth more than a safe dollar. True False Question 16 Time to attain goal: Your uncle is looking to double his investment of $10,000. He claims he can get earn 14 percent on his investment. How long will it be before he can double his investment? Use the Rule of 72 and round to the nearest year. 5 years 514 years 10 years None of the above Question 17 Profit maximization is not an appropriate goal for a firm because it is difficult to define. it does not directly account for a firm's cash flows. it does not consider the timing and riskiness of the firm's cash flows. All of the above. Question 18 Time to attain goal: Ryan Holmes wants to deposit $4,500 in a bank account that pays 8.25 percent annually. How many years will it take for his investment to grow to $10,000? (Round off to the nearest year.) 12 years 8 years 11 years 10 years * Question 19 You have $12,000 in cash. You can deposit it today in a mutual fund earning 5.7 percent semiannually; or you can wait, enjoy some of it, and invest $11,000 in your brother's business in two years. Your brother is promising you a return of at least 11.2 percent on your investment. Whichever alternative you choose, you will need to cash in at the end of ten years. Assume your brother is trustworthy and both investments carry the same risk. (Do not enter the $ sign in your answers, if you solve this problem with algebra round intermediate calculations to 6 decimal places, in all cases round your input answers to the nearest penny.) The future value of the bank investment is $ . . The future value of investing in your brother's business is $ You should choose to invest in . Question 20 Capital budgeting involves determining how much money should be invested in current assets. determining how a firm should finance or pay for its assets. determining which productive assets a firm should buy. making decisions about how much debt a firm should have in its capital structure. Chapter 5 Midterm Study Guide Mason Cogle Question 1 Ted Rogers is investing $7,500 in a bank CD that pays a 6 percent annual interest. How much will the CD be worth at the end of five years? Question 2 Kate Eden received a graduation present of $2,000 that she is planning on investing in a mutual fund that earns 8.5 percent each year. How much money can she collect in three years? Question 3 Your birthday is coming up and instead of any presents, your parents promised to give you $1,000 in cash. Since you have a part time job and thus don't need the cash immediately, you decide to invest the money in a bank CD that pays 5.2 percent quarterly for the next two years. How much money will you have at the end of two years? Question 4 Matt Murton, an outfielder for the Chicago Cubs, is expected to hit twentyfive home runs this year. If his home run hitting ability is expected to grow by 12 percent every year for the next five years, how many home runs is he expected to hit five years from now? Question 5 Maria Addai is considering an investment that pays $750 two years from now. If her opportunity cost is 6.5 percent per year, what is the maximum price she should pay for this investment today? Question 6 Tracy Chapman is saving to buy a house in five years time. She plans to put 20 percent down at that time and she believes that she will need $35,000 at that time. If she can invest in a fund that pays 9.25 percent annually, how much should she invest today? Question 7 Elizabeth Sweeney wants to accumulate $12,000 by the end of twelve years. If the interest rate is 7 percent, how much will she have to invest today to achieve her goal? Question 8 You invest $150 into a mutual fund today that pays 9 percent interest. (If you solve this problem with algebra round intermediate calculations to 6 decimal places, in all cases round your final answer to two decimal places, e.g. 5.45) a) Using the Rule of 72, approximately how long will it take to double your money? years b) Exactly how long will it take to double your money? years Question 9 Find the future value of an investment of $2,500 made today for the following rates and periods: (Do not enter the $ sign in your answers, if you solve this problem with algebra round intermediate calculations to 6 decimal places, in all cases round your final answer to the nearest penny.) a. 6.25 percent compounded semiannually for twelve years. $ b. 7.63 percent compounded quarterly for six years. $ c. 8.9 percent compounded monthly for ten years. $ d. 10 percent compounded daily for three years. $ e. 8 percent compounded continuously for two years. $ Question 10 Infosys Technologies, Inc., an Indian technology company reported a net income of $419 million this year. Analysts expect the company's earnings to be $1.468 billion in five years. What is the company's earnings expected growth rate? % Question 11 You are able to deposit $850 into a bank CD today and you will only withdraw the money once the balance is $1,000. If the bank pays 5 percent interest, how long will it take you to attain your goal? years Question 12 Caroline Weslin needs to decide whether to accept a bonus of $1,900 today or wait two years and receive $2,100 then. She can invest at 6 percent. At what annual rate is her bonus growing? bonus today? % To maximize the future value of her income should she accept the Question 13 Patrick Seeley has $2,400 that he is looking to invest. His brother approached him with an investment opportunity that could double his money in four years. What interest rate would the investment have to yield in order for Patrick's brother to deliver on his promise? % Question 14 Using higher discount rates will not affect the present value of the future cash flow. increase the present value of any future cash flow. decrease the present value of any future cash flow. None of the above. Question 15 Using higher interest rates will not affect the future value of the investment. increase the future value of any investment. decrease the future value of any investment. None of the above. Question 16 Using lower discount rates will not affect the present value of the future cash flow. increase the present value of any future cash flow. decrease the present value of any future cash flow. None of the above. Question 17 Compounding: Trish Harris has deposited $2,500 today in an account paying 6 percent interest annually. What would be the simple interest earned on this investment in five years? If the account paid compound interest, what would be the interest-on-interest in five years? $150; $95.56 $95.56; $845.56 $750; $95.56 $150; $845.56 Question 18 Interest rate: Rachael Steele wants to borrow $6,000 for a period of four years. She has two choices. Her bank is offering to lend her the amount at 7.25 percent compounded annually. She can also borrow from her firm and will have to repay a total of $8,130.93 at the end of four years. Should Rachael go with her bank or the firm, and what is the interest rate if she borrows from her firm? (Round to the nearest percent.) Bank: 8% Firm: 6% Firm: 7% Bank: 9% Question 19 Growth rate: Cleargen, a detergent manufacturer, has announced this year's net income as $832,500. It expects its net earnings to grow at a rate of 15 percent per year for the next two years, before dropping to 12 percent for each of the following two years. What is the firm's net income after four years? (Round to the nearest dollar.) $1,266,1 28 $1,233,099 $1,381,071 $1,072,260 Question 20 Time to attain goal: Elegant Designers have generated sales of $625,000 for the current year. If they can grow their sales at a rate of 12 percent every year, how long will they take to triple their sales? (Round off to the nearest year.) 8 years 7 years 10 years 9 years Chapter 6 Midterm Study Guide Mason Cogle Question 1 Future value with multiple cash flows: Ben Woolmer has an investment that will pay him the following cash flows over the next five years: $2,350, $2,725, $3,128, $3,366, and $3,695. If his investments typically earn 7.65 percent, the future value of this set of cash flows at the end of five years is $ Question 2 Present value with multiple cash flows: Saul Cervantes has just purchased some equipment for his landscaping business. He plans to pay the following amounts at the end of the next five years: $10,450, $8,500, $9,675, $12,500, and $11,635. If he uses a discount rate of 10.875 percent, the cost of the equipment he purchased today is $ Question 3 Present value with multiple cash flows: Biogenesis Inc., expects the following cash flow stream over the next five years: 2 $978,452 3 $275,455 4 $878,326 The company discounts all cash flows at a 23 percent discount rate. (Round to answer 2 decimal places. Omit $ sign in answer. If the number is negative identify with a negative symbol ()) The present value of this cash flow stream is $ Question 4 Present value of an annuity: Dynamics Telecommunications Corp. has made an investment in another company that will guarantee it a cash flow of $22,500 each year for the next five years. If the company uses a discount rate of 15 percent on its investments, the present value of this investment is $ Question 5 Future value of an ordinary annuity: Cecelia Thomas is a sales executive at a Baltimore firm. She is twentyfive years old and plans to invest $3,000 every year in an IRA account, beginning at the end of this year until she turns sixtyfive years old. If the IRA investment will earn 9.75 percent annually, she will have $ she turns sixtyfive years old. in forty years when Question 6 Computing annuity payment: Kevin Winthrop is saving for an Australian vacation in three years. He estimates that he will need$5,000 to cover his airfare and all other expenses for a weeklong holiday in Australia. If he can invest his money in an S&P 500 equity index fund that is expected to earn an average return of 10.3 percent over the next three years, he will need to save $ every year, starting at the end of this year Question 7 Perpetuity: Your grandfather is retiring at the end of this year and would like to receive a payment of $10,000 a year forever, starting when he retires. If he can invest at 6.5 percent, how much does need to invest to receive the desired cash flow? (Round answer to 2 decimal places. Omit $ sign in answer.) PV of Perpetuity = $ Question 8 Effective Annual Rate: Raj Krishnan bought a Honda Accord for a price of $17,345. He put down $6,000 and financed the rest through the dealer at an APR of 4.9 percent for four years. If payments are made monthly, the effective annual rate (EAR) is % Question 9 Growing Perpetuity: You are evaluating a growing perpetuity product from a large financial services firm. The product promises a payment beginning at $20,000 at the end of this year and which will thereafter grow at a rate of 3.4 percent annually. If you use a 9 percent discount rate for investment products, the present value of this growth perpetuity is $ Question 10 Future value with multiple cash flows: Stephanie Watson plans to adopt the following investment pattern beginning next year. She will invest $3,125 in each of the next three years, and then make investments of $3,650, $3,725, $3,875, and $4,000over each of the following four years. If the investments are expected to earn 11.5 percent annually, she will have $ at the end of the seven years. Question 11 Computing annuity payment: Gary Whitmore is a high school sophomore. He currently has $7,500 in a money market account paying 5.65 percent annually. He plans to use this and his savings over the next four years to buy a car at the end of his sophomore year in college. He estimates that the car will cost him $12,000 in four years. To achieve his target he must he invest $ year for the next four years in the money market account every Question 12 Future value of an annuity due: Jeremy Denham plans to save $5,000 every year for the next eight years, starting today. At the end of eight years, Jeremy will turn 30 years old and plans to use his savings towards the down payment on a house. If his investment in a mutual fund earns him 10.3 percent annually he will have $ years when he will need the money to buy a house. in eight Question 13 Present value of an annuity due: Sharon Kabana has won a state lottery for which she will receive a payment of $89,729.45every year, starting today for the next 20 years. If she normally invests at a rate of 7.25 percent, the present value of the annuity cash flows that she will receive is $ Question 14 Effective annual interest rate: Find the effective annual interest rate (EAR) on each of the following: a. 6 percent compounded quarterly. (Round answers to 2 decimal places. Omit % sign in answer.) EAR = % b. 4.99 percent compounded monthly. (Round answers to 2 decimal places. Omit % sign in answer.) EAR = % c. 7.25 percent compounded semiannually. (Round answers to 2 decimal places. Omit % sign in answer.) EAR = % d. 5.6 percent compounded daily. (Round answers to 2 decimal places. Omit % sign in answer.) EAR = % Question 15 Effective annual interest rate: You are considering three alternative investments: Option A. A 3year bank CD paying 7.5 percent interest compounded quarterly. (Round answers to 2 decimal places. Omit % sign in answer.) EAR = % Option B. A 3year bank CD paying 7.3 percent interest compounded monthly. (Round answers to 2 decimal places. Omit % sign in answer.) EAR = % Option C. A 3year bank CD paying 7.75 percent interest compounded annually. (Round answers to 2 decimal places. Omit % sign in answer.) EAR = % Question 16 Future value: Gary Kornig will turn 30 years old next year. He comes up with a plan to save for his retirement at 65 years of age. Currently, he has saved $6,950 in an IRA account earning 8.3 percent annually. He also currently has invested an inheritance of$5,000 in a money market account earning 5.25 percent and plans to leave it as part of his retirement savings. He has set himself a retirement target of $1,000,000. He plans to put aside a fixed amount every year, starting next year, in a mutual fund that will earn 9 percent annually. Gary will have to save $ every year in order to achieve his goal. Question 17 Annuities: You are now 50 years old and plan to retire at age 65. You currently have a stock portfolio worth $150,000, a 401(k) retirement plan worth $250,000 and a money market account worth $50,000. Your stock portfolio is expected to provide you annual returns of 12 percent, your 401(k) investment will earn you 9.5 percent annually, and the money market account earns 5.25 percent, compounded monthly. a. If you do not save another penny for the next 15 years, you will have $ when you retire at age 65. (Do not round present value factor calculations. Round other intermediate calculations and the final answer to 2 decimal places, e.g. 12.51. Omit $ sign in answer. Use rounded amount for future calculations.) b. If you invest $12,000 every year in your 401(k) plan for the next 15 years starting next year, you will have $ in total at retirement. (Do not round present value factor calculations. Round other intermediate calculations and the final answer to 2 decimal places, e.g. 12.51. Omit $ sign in answer. Use rounded amount for future calculations.) c. Using your answer from part b, assume that you expect to live another 25 years after retirement (i.e., until age 90). If you take your total investments at retirement and invest it in an account paying 8 percent, you can withdraw $ and leave nothing in your account at age 90. (Round present value factor calculations to 4 decimal places, e.g. 125.1232. Round other intermediate calculations and the final answer to 2 decimal places, e.g. 12.51. Omit $ sign in answer.) d. Using your investment value from part b, if you wanted a perpetuity, how much will you be able to withdraw $ touching your principal? each year starting a year after retirement without Question 18 Loan amortization: The Sundarams are buying a new 3,500 square feet house in Muncie, Indiana and will borrow $237,000from Bank One at a rate of 6.375 percent for 15 years. a. Their monthly loan payment is $ . (Round answer to 2 decimal places. Omit $ sign in answer.) b. At the end of 5 years and immediately after making their 60th payment the principal amount of the loan is $ . (Round answer to 2 decimal places. Omit $ sign in answer.) c. Base on your answer to question b, the Sundarams paid $ in interest and $ in principal during the first 5 years of the loan. Question 19 If your investment pays the same amount at the end of each year for a period of six years, the cash flow stream is called a perpetuity. an ordinary annuity. an annuity due. None of the above Question 20 A firm receives a cash flow from an investment that will increase by 10 percent annually for an infinite number of years. This cash flow stream is called a growing perpetuity. an ordinary annuity. a growing annuity. an annuity due. Question 21 The true cost of lending is the annual percentage rate. effective annual rate. quoted interest rate. None of the above Question 22 Growing perpetuity: Jack Benny is planning to invest in an insurance company product. The product will pay $10,000 at the end of this year. Thereafter, the payments will grow annually at a 3 percent rate forever. Jack will be able to invest his cash flows at a rate of 6.5 percent. What is the present value of this investment cash flow stream? (Round to the nearest dollar.) $326,9 08 $312,766 $285,714 $258,133 Question 23 Growing annuity: Hill Enterprises is expecting tremendous growth from its newest boutique store. Next year the store is expected to bring in net cash flows of $675,000. The company expects its earnings to grow annually at a rate of 13 percent for the next 15 years. What is the present value of this growing annuity if the firm uses a discount rate of 18 percent on its investments? (Round to the nearest dollar.) $7,115,449 $6,448,519 $6,750,000 $5,478,320 Question 24 Effective annual rate: Desire Cosmetics borrowed $152,300 from a bank for three years. If the quoted rate (APR) is 11.75 percent, and the compounding is daily, what is the effective annual rate (EAR)? (Round to one decimal place.) 11.6% 11.75% 14.3% 12.5% Chapter 8 Midterm Study Guide Mason Cogle Question 1 Bond price: Regatta, Inc., has sevenyear bonds outstanding that pay a 12 percent coupon rate. Investors buying the bond today can expect to earn a yield to maturity of 8.875 percent. Assuming annual coupon payments, the current value of these bonds is $ Question 2 Zero coupon bonds: Northrop Real Estate Company is planning to fund a development project by issuing 10year zero coupon bonds with a face value of $1,000. Assuming the appropriate discount rate is 14 percent and semiannual compounding, the price of these bonds is $ Question 3 Yield to maturity:Rudy Sandberg wants to invest in fouryear bonds that are currently priced at $868.43. These bonds have a coupon rate of 6 percent and pay semiannual coupons.The current market yield on this bond is %. Question 4 Realized yield: Four years ago, Lisa Stills bought sixyear, 5.5 percent coupon bonds issued by the Fairways Corp. for $947.68. If she sells these bonds at the current price of $894.52, the realized return on these bonds is similar couponpaying bonds) %. (Assume annual coupons on Question 5 Bond price: Pullman Corp issued 10year bonds four years ago with a coupon rate of 9.375 percent, paid semiannually. At the time of issue, the bonds sold at par. Today, bonds of similar risk and maturity will pay a coupon rate of 6.25 percent. The current market price of the firm's bonds is $ Question 6 Zero coupon bonds: Kintel, Inc., wants to raise $1 million by issuing sixyear zero coupon bonds with a face value of $1,000. Their investment banker informs them that investors would use an 11.4 percent discount rate on such bonds. At this discount rate the bonds would sell for $ (*), and the firm would have to issue (**) shares in order to raise $1 million. Assume semiannual compounding for payments Question 7 Yield to maturity: Electrolex, Inc., has fouryear bonds outstanding that pay a coupon rate of 6.6 percent semiannually. If these bonds are currently selling at $914.89, the yield to maturity that an investor can expect to earn on these bonds is annual yield is %. % and the effective Question 8 Realized yield: Trevor Price bought 10year bonds issued by Harvest Foods five years ago for $936.05. The bonds make semiannual coupon payments at a rate of 8.4 percent. If Trevor sells the bonds today at a current price of $1,048.77, Trevor would realize a % simple annual yield. Question 9 Rachette Corp. issued 20year bonds five years ago. These bonds, which pay semiannual coupons, have a coupon rate of 9.735 percent and a yield to maturity of 7.95 percent. (*) (Round your answer to 2 decimal places.) (**) (Round your answer to 2 decimal places.) (All intermittent calculations should be rounded to 4 decimal places before carrying to next calculation.) A. The bond's current price is $ . (*) %. (**) B. If the bonds are called after five more years at a premium of 13.5 percent over par value, the realized yield to investors is Question 10 Which ONE of the following statements is true? Zero coupon bonds have no coupon payments over its life and only offer a single payment at maturity. Zero coupon bonds sell well below their face value (at a deep discount) because they offer no coupons. The most frequent and regular issuer of zero coupon securities is the U.S. Treasury Department. All of the above are true. Question 11 Bond price: Kevin Rogers is interested in buying a fiveyear bond that pays a coupon of 10 percent on a semiannual basis. The current market rate for similar bonds is 8.8 percent. What should be the current price of this bond? (Round to the nearest dollar.) $1,04 8 $1,099 $982 $965 Question 12 Zero coupon bonds: Shana Norris wants to buy fiveyear zero coupon bonds with a face value if $1,000. Her opportunity cost is 8.5 percent. Assuming annual compounding, what would be the current market price of these bonds? (Round to the nearest dollar.) $1,113 $1,023 $665 $890 Question 13 Yield to maturity: Jenny LePlaz is looking to invest in some fiveyear bonds that pay annual coupons of 6.25 percent and are currently selling at $912.34. What is the current market yield on such bonds? (Round to the closest answer.) 8.5% 6.5% 7.5% 9.5% Question 14 Yield to maturity: Jane Almeda is interested in a 10year bond issued by Roberts Corp. that pays a coupon of 10 percent annually. The current price of this bond is $1,174.45. What is the yield that Jane would earn by buying it at this price and holding it to maturity? (Round to the closest answer.) 7% 7.5% 8% 8.5% Question 15 Yield to maturity: Huan Zhang bought a 10year bond that pays 8.25 percent semiannually for $911.10. What is the yield to maturity on this bond? 8.6% 10.6% 9.6% 7.6% Question 16 Realized yield: Five years ago, Shirley Harper bought a 10year bond that pays 8 percent semiannually for $981.10. Today, she sold it for $1,067.22. What is the realized yield on her investment? (Round to the nearest percent.) 8% 10% 9% 7% Question 17 Effective annual yield: Suppose an investor earned a semiannual yield of 6.4 percent on a bond paying coupons twice a year. What is the effective annual yield (EAY) on this investment? 12.80% 6.40% 12.36% None of the above. Question 18 Suppose taxable corporate bonds are yielding 8%, while at the same time, municipal bonds of comparable risk and maturity are yielding 6%. Which bond is more attractive to an investor in a 40% tax bracket? Muni, which has a higher yield than the corporate bond. Corporate, since 8% is higher than 6% Muni, since investor prefers holding safer bonds and dislikes corporate risk. Neither, they both offer the same yield. Question 19 Suppose the yield curve is upward sloping and conveys the following information: YTM in 1 year is 7% YTM in 2 years if 8% YTM in 3 years is 9% What should the price of a 3 year, 6% coupon bond with annual coupons be, assuming the next coupon is due in one year? Question 20 Suppose taxable corporate bonds are yielding 8%, while at the same time, municipal bonds of comparable risk and maturity are yielding 6%. Calculate the break even tax rate.

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Sydney Werry Hazelett American Sign Language One 24 October 2011 A Place of Their Own Chapter Nine The Little Papers were residential school's periodicals. They began for very practical reasons, to provide vocational training for deaf pupils. Printing bec
Arizona - ASL - 371
Sydney Werry Hazelett American Sign Language One 20 October 2011 A Place of Their Own Chapter Eight 1. Originally, starting in 1854 the first organization for the deaf was founded, the New England Gallaudet Association of Deaf Mutes. Over the next 125 yea
Arizona - ASL - 371
Sydney Werry Hazelett American Sign Language 13 October 2011 A Place Of Their Own Chapter Seven 1. Their main goal and focus was to make sure they prepared their pupils to become working members of society by graduation. 2. The different vocations that we
Arizona - ASL - 371
Sydney Werry Hazelett American Sign Language 1 15 September 2011 A Place Of Their Own Chapter Three 1. The first Bolling family originated after Robert came in the middle of the 17th century. Thomas Bolling and Elizabeth Gay Bolling were married and had t
Arizona - ASL - 371
Sydney Werry Hazelett American Sign Language 1 1 September 2011 A Place Of Their Own, Chapter One 1.The deaf community in the United States did not exist before the late eighteenth and early nineteenth centuries. This is because the only known concentrati
Arizona - ASL - 371
Sydney Werry Hazelett American Sign Language One 16 November 2011 A Place of Their Own Chapter Eleven1. Robert P. McGregor founded the Cincinnati Day School that used sign language, and became the first president of the NAD in 1910. He believed that if d
Arizona - ASL - 371
Sydney Werry Hazelett American Sign Language One 28 November 2011 A Place of Their Own Chapter Thirteen 1. Two reasons that the importance of work never really surfaced until the late 19th century was because deaf Americans felt they needed to establish t
Arizona - ASL - 371
Sydney Werry Hazelett American Sign Language One 3 November 2011 Reflection on "Love is Never Silent"While watching "Love is Never Silent" many things had me thinking, the way Margaret's parents relied on her, the way Margaret was so persistent about pro
Arizona - ASL - 371
Sydney Werry Hazelett American Sign Language One 1 December 2011 A Place of Their Own Before reading the book, "A Place of Their Own" I had no idea of the trials and tribulations that the deaf community had to go through in order to get to where they are
Maryland - FINANCE - BUFN 754
BULL SPREAD FUEL HEDGING EXAMPLE - CALLS ONLY Use when want to hedge short position for a specific price range WTI Crude Price Purchased Written Call Combined Net at T Call K=80 K=82 Premium Profit 80 82 20 70 0 -0 -0.35 -0.35 73 0 -0 -0.513 -0.513 15 76
Maryland - FINANCE - BUFN 754
Expected Return and Risk ExampleProbability 0.05 0.25 0.40 0.25 0.05 1.00 1 2 R1 R2 w1 0.00 0.20 0.40 0.60 0.80 1.00 Return 50 30 10 -10 -30 E(R ) Pr*R 2.5 7.5 4 -2.5 -1.5 10 Pr(R-E(R )2 80 100 0 100 80 360 18.97Efficient Frontier for 2 Assets16 14 12
Maryland - FINANCE - BUFN 754
Corporate Risk Management Risk Management BUFN 754 COURSE OVERVIEWProfessor Cliff Rossi Spring Semester, 2013 Copyright 2007Course Logistics What this course is about Understanding what risk management is and how it can be measured Highlight the type
Maryland - FINANCE - BUFN 754
Chicago Board Options ExchangeMargin ManualApril 2000TABLE OF CONTENTSINTRODUCTION . 3 INITIAL AND MAINTENANCE MARGIN REQUIREMENTS Long Put or Long Call (9 months or less until expiration) . 4 Long Put or Long Call (more than 9 months until expiration
Maryland - FINANCE - BUFN 754
Futures Price $72.00 Future Long Futures Short Futures Net Spot Price Position Position Unhedged Profit Profit $60 -$12 $12 $0 $61 -$11 $11 $0 $62 -$10 $10 $0 $63 -$9 $9 $0 $64 -$8 $8 $0 $65 -$7 $7 $0 $66 -$6 $6 $0 $67 -$5 $5 $0 $68 -$4 $4 $0 $69 -$3 $3 $
Maryland - FINANCE - BUFN 754
SUMMARY OUTPUT Regression Statistics Multiple R 0.9283723459 R Square 0.8618752126 Adjusted R Square 0.8512502289 Standard Error 0.0101259736 Observations 15 ANOVA df Regression Residual Total Intercept X Variable 1 1 13 14 SS 0.0083174406 0.0013329594 0.
Maryland - FINANCE - BUFN 754
Workbook ContentsSpot Prices for Crude Oil and Petroleum ProductsClick worksheet name or tab at bottom for data Worksheet Name Description Data 1 Crude Oil Data 2 Conventional Gasoline Data 3 RBOB Regular Gasoline Data 4 No. 2 Heating Oil Data 5 Ultra-L
Maryland - FINANCE - BUFN 754
RaRoC and SVA Examples Exposure Regulatory Capital Economic Capital (EC) Expected Loss (EL) Regulatory Capital/Exposure EC/Exposure Target RaRoC Operating Costs (OC) Cost of Debt (i) Asset All in Return (r ) Allocated Debt (D) RaRoC - Regulatory Capital S
Maryland - FINANCE - BUFN 754
Simple DEAR Example - S&P 500Date 8/2/2010 7/30/2010 7/29/2010 7/28/2010 7/27/2010 7/26/2010 7/23/2010 7/22/2010 7/21/2010 7/20/2010 7/19/2010 7/16/2010 7/15/2010 7/14/2010 7/13/2010 7/12/2010 7/9/2010 7/8/2010 7/7/2010 7/6/2010 7/2/2010 7/1/2010 6/30/20
University of Toronto - PSY - 210
Chapter 1 Background and Theories Status of children in the Greek and Roman civilization: o Plato and Aristotle wrote about the importance of education, but also defended practice such as infanticide. o Exploitation of children is also fairly common,
University of Toronto - PSY - 210
Chapter 3 Genetics: the biological context of development Cell division DNA is organized into chromosomes. 46 chromosomes for human cells, 23 for gametes. 22 pairs are the autosomes, the 23rd pair are the sex chromosomes. XX female, XY male. Generally div
University of Toronto - PSY - 210
Chapter 2 Research Methods Scientific method: the system of rules used by scientists to conduct and evaluate their research. Theory: a broad set of statements describing the relation between a phenomenon and the factors assumed to affect it. Theories have
University of Toronto - PSY - 210
Chapter 7 Cognitive Development: The Piagetian Approach Cognition: higher-order mental processes, such a reasoning and problem solving, through which humans attempt to understand the world. Piaget's theory Piaget's research focused mainly on the child's u
University of Toronto - PSY - 210
Chapter 9 Sociocultural Approach Nature of the approach Individuals inherit their environments as much as they inherit their genes. Culture: the accumulated knowledge of people encoded in their language and embodied in the physical artifacts, beliefs, val
Maryland - PSYC - 200
College of Behavioral and Social Sciences Statistical Methods in Psychology PSYC200 Tomlinson Essay Project Have you ever felt instantly smarter when wearing someone else's clothing? In fact, recent studies show that clothing can have an actual impact on
Maryland - PSYC - 200
College of Behavioral and Social Sciences Statistical Methods in Psychology PSYC200 Tomlinson Psych Homework 11. a. Null: H: =9.5. There is no effect of eating the candy on weight loss. Any difference would be due to chance. Alternative: H : >9.5. Eating
Maryland - PSYC - 200
College of Behavioral and Social Sciences Statistical Methods in Psychology PSYC200 Tomlinson Psych Homework 2 1. a. nominal b. ordinal c. ratio d. nominal e. interval f. ordinal g. nominal h. ordinal 2. a. 125, 135 b. 129.5, 130.5 c. 98.5, 99.5 d. 1.65,
Maryland - PSYC - 200
College of Behavioral and Social Sciences Statistical Methods in Psychology PSYC200 Tomlinson Psych Homework 6 1. a. We used simple random sampling because we chose the numbers out of a hat. b. Instead, we could have used systematic random sampling. We wo
Maryland - PSYC - 200
College of Behavioral and Social Sciences Statistical Methods in Psychology PSYC200 Tomlinson Psych Homework 7 1. i. p(males) = males/total = 60/100 = .6 ii. p(smokers)= total yes/ total= 31/100 = .31 iii. p(male and female)= 0 iv. An event is independent
Maryland - UNIV - 100
Office of Undergraduate Studies The Student in the University UNIV100 Strumph Journal 2 After our class last week, the Meyers Briggs assessment could not leave my thoughts. As I talked to classmates, professors, friends, and even my parents, I found mysel
Maryland - UNIV - 100
Office of Undergraduate Studies The Student in the University UNIV100 Strumph Self-Reflecting Journal People always warned me that college would fly by but I had no idea how true that really is. I feel like just yesterday I was struggling to carry all of
Maryland - UNIV - 100
Office of Undergraduate Studies The Student in the University UNIV100 Strumph Wellness JournalI stared into the diner with a smile on my face; what should I get to eat today? Chicken fingers? Pizza? French fries and ice cream? It all sounded so great I w
Maryland - UNIV - 100
Office of Undergraduate Studies The Student in the University UNIV100 Strumph 3 Questions to ask panel 1. How complicated is it to switch from one major to another within BSOS? 2. In the past couple of years, have most people that graduated with a major i
Maryland - UNIV - 100
Office of Undergraduate Studies The Student in the University UNIV100 Strumph Letter to Past Self Dear Past Self, As I come to the finish of my first semester, there are some things I hope you learn from my mistakes. Most importantly, you need to know tha
Maryland - SOCY - 105
College of Behavioral and Social Sciences Introduction to Contemporary Social Problems SOCY105 ReyAround the country, and worldwide, people are treated wrongly everyday due to their racial-ethnic background. Kenneth Jost stated, "Whether the offenses are
Maryland - SOCY - 105
College of Behavioral and Social Sciences Introduction to Contemporary Social Problems SOCY105 Rey Economic Problems US is made up of social classes 1. Social classes- ways different economic individuals are measured in society Economy- represents entire
Maryland - SOCY - 105
College of Behavioral and Social Sciences Introduction to Contemporary Social Problems SOCY105 Rey Gender and Sexual Inequalities women women are a minority group men payed more females make up 50.7 of population in 60s and 70s women begin to reform sexis
Maryland - SOCY - 105
College of Behavioral and Social Sciences Introduction to Contemporary Social Problems SOCY105 Rey Urbanization and Socialization evolution of cities first cities appeared in Mesopotamia, then nile, indus, and yellow river valleys city: large number of pe
Maryland - SOCY - 105
College of Behavioral and Social Sciences Introduction to Contemporary Social Problems SOCY105 Rey Race and Ethnic Relations Prejudice- attitude Discrimination- action, differential treatment Appearance, age, sex, height, race Minority groups- groups sing
Ohio State - STAT - 5301
Lecture Notes Part 6Tests of significanceREADING IPS Sections 6.2-6.3Part 6: Tests of SignificanceSTATISTICAL INFERENCE REVISITED Construct a model for the world, including parameters Tests: Test if particular values parameters of that model are consi
Ohio State - STAT - 5301
Lecture Notes Part 9Comparing two proportions Associations for two-way tables Goodness of fitREADING IPS Sections 8.2, 9.1-9.3Part 9: Comparing Two ProportionsEXAMPLE: Loan defaultFor profit colleges and universities have recently been the target of
Cornell - CS - 4620
Assignment 1 Task: Create basic Sphere and Cylinder Cylinder classFor the Sphere Class:For the triangle mesh function:
Cornell - CS - 4620
Assignment 2 Task render scenes with shaders Scene class (purpose of rendering)Blinn_phong.fpblinn_phong.vpfire_shader.fpfire_shader.vpflower.fpflower.vp
Cornell - CS - 4620
Assignment 3 Task render scenes with shaders BasicRayTracer ClassrenderImage method and shadeRay method in WhittedRayTracer Class
Cornell - CS - 4620
Cornell - CS - 4620
void snowflake(GL2 gl, int level) cfw_ if (level = 1) cfw_ gl.glBegin(GL2.GL_LINES); gl.glVertex2f(0.0f, 0.0f); gl.glVertex2f(1.0f, 0.0f); gl.glEnd(); else cfw_ double length = .33333; /horizontal at origin gl.glPushMatrix(); gl.glScaled(length, length,
Cornell - CS - 4620
22:02 I. Ray tracingA. Helpful link: http:/www.cs.unc.edu/~rademach/xroadsRT/RTarticle.html B. Is a technique for rendering threedimensional graphics with very complex light interactions C. Trace a ray, hit a point or not, figure out what light arrives a
Cornell - CS - 4620
22:02 I. Overview A. Rotation, shear, and scale are all linear. But not translations. To have a matrix with translations as well and its still linear use homogenous coordinates (0 for vector, 1 for point) II. Translation A. Translation by ut then by us is
Cornell - CS - 4620
22:02 I. Bases A. expressing vectors in different bases II. Motivation A. Global coordinate system B. Local coordinate system C. How do both coordinate systems, relate to one another. C.1. Ex. Coordinate system on sun and coordinate system on earth for us
Cornell - CS - 4620
22:03 I. General Rotation Matrices A. A rotation in 2D is around a point B. A rotation in 3D is around an axis B.1. So 3D rotation is w.r.t a line, not just a point B.2. There are many more 3D rotations than 2D B.2.a. A 3D rotation around a given space, n
Cornell - CS - 4620
Notes for Graphics Test21:17parametric continuity of spline is continuity of coordinate functions Geometric continuity (G) is continuity of the curve itselfNeither form of continuity is guaranteed by the other can be c1 but not g1 when p(t) comes to a