Problem Set 1 FIN 7000
Problem 1:
(3pts) Part 1 [Calculate PV]:
Using the annual interest rate of 4 percent (i.e., r = .04), calculate the present values (at t = 0) for the
following payments:
a. $1,000,000 at t = 1
b. $1,000,000 at t = 2
c. $1,000,000 at
Problem Set #3 FIN 7000
Solutions (in bold)
(5pts, 1ea) Problem 1: Let the effective annual rate be 5 percent (i.e., r = .05) for all maturities.
a. Calculate the present value of a perpetuity that makes annual payments of $1,000,000 every
year forever, w
Problem Set 6 FIN 7000
Kodak used to primarily produce and distribute photographic paper and developing
materials for traditional (i.e., non digital) photographic methods. A sizable portion of
their business was home photography. Since they were one of th
Problem Set 4 FIN 7000
(4pts) Problem 1: Calculate the annual internal rates of return (IRR) for the following investments (time t
is in years):
a.
b.
c.
d.
At t = 0, the cost is $100.
At t = 0, the cost is $150.
At t = 0, the cost is $100.
At t = 0, the
1
Problem 1.
You have a project that is very similar to the types of projects in SleazeCo (an all equity firm).
On average the project is expected to generate positive cash flows starting next year (at t = 1 ) of
$400,000, growing at 5 percent per year fo
Problem Set 2 FIN 7000
(5pts) Problem 1 [SAIR to EAR Conversion] [Discounting & Compounding]:
Fill in the table below for each of the following interest rates:
Case
1
2
3
4
5
Stated Annual Rate
.12
.12
.12
.12
.12
Compounding
Periods Per Year
1
2
4
12
inf
Question 1
0 out of 0 points
Before starting this lab assignment, consider the following questions: Is
there one method of calculating a number that best describes the
center, or typical value, for all types of data sets? If so, what it it
and why is it t
Question 1
For questions 1-4, use the following data on number of Facebook friends in two sa
Male
46
65
106 153 172 244 342 345 458 810
Female
121
184
191
254
288
329
404
What is the correct 5 number summary for the male sample?
Selected
Answer:
Answers:
Question 1
2.5 out of 2.5 points
For questions 1-3, use the following information:
A small survey was done to collect information on the number
of Facebook friends college students have. Results were found for both
male and female.
Female
288
476
329
191
Question 1
1 out of 1 points
Identify the study as observational or experimental.
A T.V. show's executives raised the fee for commercials following a report
that the show received a
rating in a survey of viewers.
Question 2
2 out of 2 points
Answer the q
Question 1
1.25 out of 1.25 points
For the random variable x, the dollar amount of loss for a certain risk covered by
insurance, an actuary estimates the following probability distribution:
Amount of Loss (x)
$ 0
$180
$300
Probability of Loss (P(x)
0.30
0
Award: 0.76 out of 0.76 points
How will each of the following changes in demand and/or supply affect equilibrium price and
equilibrium quantity in a competitive market? Specifically does each pair of changes lead to an
increase, decrease, or is the outcom
Award: 0.76 out of 0.76 points
In the table below, individual demand schedules for Tex, Dex and Rex are shown in addition to total
market demand.
a. Fill in the missing values in this table.
Tex
Qd
Price
Dex
Qd
Rex
Qd
$8
3
2
7
5
3
6
4
7
5
9
4
11
5
6
Total
Award: 1.66 out of 1.66 points
Show correct answer
Potatoes cost Janice $1.25 per pound, and she has $5.00 that she could possibly spend on potatoes
or other items. If she feels that the first pound of potatoes is worth $1.50, the second pound is worth
$1
Problem Set 4 FIN 7000
Solutions (in bold)
(4pts) Problem 1: Calculate the annual internal rates of return (IRR) for the following investments (time t
is in years):
a. At t = 0, the cost is $100. The cash flows are $100 at t = 1 and $250 at t = 3.
Solve f
Problem Set 5 FIN 7000
Solutions (in bold)
Problem 1: The default-free yield curve on zero-coupon U.S. Government Treasury securities is given
below.
Maturity (in years)
1
2
3
4
5
6
Rate
.01
.015
.02
.025
.0275
.03
Currently you can buy a corporate bond s
Problem Set 4 FIN 7000
Solutions (in bold)
(4pts) Problem 1: Calculate the annual internal rates of return (IRR) for the following investments (time
t is in years):
a. At t = 0, the cost is $100. The cash flows are $100 at t = 1 and $250 at t = 3.
Solve f