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Quantitative methods 1 when alan hears that a

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Quantitative Methods1. When Alan hears that a baseball loving friend is coming to visit, he purchasestwo premium seating tickets for $45 per ticket for an evening game. As thedate of the game approaches, Alan's friend telephones and says that his triphas been cancelled. Fortunately for Alan, the tickets he holds are in highdemand as there is chance that the leading Major League Baseball hitter willbreak the home run record during the game. Seeing an opportunity to earn ahigh return, Alan puts the tickets up for sale on an internet site. The auctioncloses at $150 per ticket. After paying a 10% commission to the site (on theamount of the sale) and paying $8 total in shipping costs, Alan's holdingperiod return is approximately:A. 191%.B. 182%.C. 202%.The correct answer is A.The holding period return is calculated as: (ending price −beginning price +/any cash flows) / beginning price. Commission of $30 (0.10 × 150× 2 tickets) and the shipping cost of $8 (total for both tickets). Thus, her holdingperiod return is: (2 × 150 − 2 × 45 − 30 − 8) / (2 × 45) = 1.91, or approximately 191%.
2. Lilly and Lara borrowed $150,000 to finance their vacation. The monthlypayment loan has a term of seven years and a 14% interest rate. The amountof interest in first EMI and the amount of principal in second EMI areapproximately:

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Term
Fall
Professor
NoProfessor
Tags
Income Statement, Corporate Finance, Generally Accepted Accounting Principles, gross domestic product

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