Homework #4
Due:
Name:_
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
Homework #3
Due:
Name:_
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
Homework #1
Due:
Name:_
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
Homework #6
Due:
Name:_
1. Suppose AAPL (Apple Inc.) will yield the following payoffs and returns in the next period:
Probability
20%
15%
35%
30%
Calculate the mean, variance, and standard deviation for AAPL.
Return
-18%
-5%
15%
20%
2. Suppose KWHIY (Kawa
Homework #5
Due:
Name:_
1. Suppose your firm has the following income statement and balance sheet for 2014.
Fiscal Year
2014 (in millions)
Sales
$4,780
Cost of Sales
$2,444
Gross Profit
$2,336
Operating Expenses
$890
Financing & Other Income
$16
Income Ta
Homework #2
Due:
Name:_
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