Use the data far below to estimate the beta of Nike and Dell stock based on their
monthly returns from 2007-2011.
You are evaluating a project that requires an investment of $90 million today and provides a
of $115 million for sure one year from now. You decide to use 100% debt financing, that is,
$90 million. The risk-free rate is 5% and the tax rate i
Suppose Clorox can lease a new computer data processing system for $975,000 per year for
for $4.25 million. Assume Clorox has a borrowing cost of 7% and a tax rate of 35%, and the
a. If Clorox will depreciate the computer equipment on a strai
Three years ago, you founded Outdoor Recreation, Inc., a retailer specializing in the sale of
equipment and clothing for recreational activities such as camping, skiing, and hiking. So fa
your company has gone through three funding rounds:
The Greek Connection had sales of $32 million in 2009, and a cost of goods sold of $20 mil
balance sheet for the firm appears below:
THE GREEK CONNECTION
As of December 31, 2009
Simple Simons Bakery purchases supplies on terms of 1/10, net 25. If Simple Simons choo
take the discount offered, it must obtain a bank loan to meet its short-term financing needs. A
local bank has quoted Simple Simons owner an interest rat
Using the data in the table below, calculate the return for investing in Boeing stock (BA) fro
2, 2009, and also from January 2, 2011, to January 3, 2012, assuming all dividends are reinv
Boeing Corporation has just issued a callable (at par) three-year, 5% coupon bond with sem
annual coupon payments. The bond can be called at par in two years or anytime thereafter o
coupon payment date. It has a price of $99. What is the bon
You are trying to decide whether to make an investment of $500 million in a new technolog
Gobstoppers. There is a 60% chance that the market for these candies will produce profits o
20% chance the market will produce profits of $50 million, a
You own a call option on Intuit stock with a strike price of $40. The option will expire in ex
a. If the stock is trading at $55 in three months, what will be the payoff of the call?
b. If the stock is trading at $35 in three months,
September 16, 2015
Fall Commercial Bank Management Section: OL1
SEC (Securities and Exchange Commission) Summary
SEC (Securities and Exchange Commission) is a government commission created by
Congress to regulate the
Personal financial advisors typically do the following:
Meet with clients in person to discuss their financial goals
Explain the types of financial services they provide to potential clients
Educate clients and answer questions about investment options an
Major Medical Insurance - This covers many out-of-hospital costs. It may also extend your
basic policy and any additional days of hospital care.
Marketing - To make goods available to buyers in a planned way which encourages people to
buy more of them.
Financial analysts typically do the following:
Recommend individual investments and collections of investments, which are known as
Evaluate current and historical data
Study economic and business trends
Study a companys financial statements to
Economic Conditions - Consumer prices (inflation), consumer spending, and interest rates.
Economic Reasoning - Making decisions by comparing costs and benefits.
Economy - Consists of the ways in which people make, distribute, and use their goods and
Career - A life-work chosen by a person to use personal talent, provide some service or goods,
earn money, and contribute to society.
Career Plan - Outlines the steps you need to take to reach your career goal.
Catastrophic Health Insurance - Often includ
Loan Management and Student Loan Consolidation
Your student loans are a serious financial obligation that must be repaid. In addition, to the
amount that you borrow (the principal); you will also be charged interest for the use of the loan
AAdvertising - To make something known generally or in public, especially in order to sell it.
Affinity Fraud - A scam that targets members of a certain demographic.
Amortization - Payment of a portion of the principle of a mortgage loan, reducing or amor
Financial managers typically do the following:
Prepare financial statements, business activity reports, and forecasts
Monitor financial details to ensure that legal requirements are met
Supervise employees who do financial reporting and budgeting
Operating assets are longlived assets that are used in normal
business operations. They are not held for resale to customers.
Investments in operating assets are essential to the success of
most businesses. There are three major categories of operating
The cost of property, plant, and equipment includes the purchase
price of the asset and all expenditures necessary to prepare the
asset for its intended use.
Land. Land purchases often involve real estate commissions,
legal fees, bank fees, title search f
Companies sometimes need cash before customers pay their
account balances. In such situations, the company may choose to
sell accounts receivable to another company that specializes in
collections. This process is called factoring, and the company that
A similar entry would be made to record amortization expense for
each type of intangible asset. The entry would include a debit to
amortization expense and a credit to the accumulated
amortization or intangible asset account.
Copyrights. Companies amortiz
Owning a business can be one of the most rewarding and
satisfying ways of meeting financial goals and ensuring that a
persons future is secure and fulfilling. Todays economy yields
many opportunities to people with different skills and strengths.
One of t
Intangible assets include patents, copyrights, trademarks, trade
names, franchise licenses, government licenses, goodwill, and
other items that lack physical substance but provide longterm
benefits to the company. Companies account for intangible assets
Tellers typically do the following:
Count the cash in their drawer at the start of their shift
Accept checks, cash, and other forms of payment from customers
Answer questions from customers about their accounts
Prepare specialized types of funds, such as
Debt the sum of money or obligations you owe
Deductible the amount that the indivual must pay before the insurance company pays its share
Defaulting on a loan not repaying a loan as promised
Donation money given to charity
Down payment a percent of the pu
stock - owning a small part of a company or a stock "share" of the company (See Wikipedia)
bond - a formal contract to repay borrowed money with interest at fixed intervals, a paper
certificate is issued much like a stock certificate (See Wikipedia)
401(k) a savings plan for retirement
APR Annual Percentage Rate for interest paid on a card
APY Annual Percentage Yeild describes interest paid to a savings account or certificate
Assets what you own or have paid for
ATM Automated Teller Machine where and
A.T.M. Automated Teller Machine; cash dispenser
Banknote-Piece of paper money.
bitcoin Digital currency which allows payments to be sent from one party to another without
going through a financial institution.
borrow Obtain money which must be returned.