1. Peterson Pharmaceutical is a drug manufacturer that produces and markets blood pressure
medications. The firm has recently posted a Return on Equity (ROE) of 16% due to the advances
they have made with new drug therapies. As a r
1. Suppose that one-year zero-coupon US Treasury bonds with a $10,000 face value are currently
selling for $9,852. Similarly zero-coupon Treasuries with two years to maturity are selling for $9,481 and
those with five years to matu
1. What effect will an interest rate increase have on the value today of a loan repayment to be
made in one year?
a. Will the percentage change in value brought about by a rise in the interest rate be
greater for a payment due in o
1. Suppose AAPL (Apple Inc.) will yield the following payoffs and returns in the next period:
Calculate the mean, variance, and standard deviation for AAPL.
2. Suppose KWHIY (Kawa
1. Suppose your firm has the following income statement and balance sheet for 2014.
2014 (in millions)
Cost of Sales
Financing & Other Income
1. If you can afford to pay $1,000 per month for your mortgage loan and the current annual APR is
4.5%, how much can you afford to purchase if you are willing to take a 30 year mortgage?
2. If you are 10 years into the mortgage fou