Ch. 10 Financial Investments
Investment risk - the risk principally associated with savings placed in financial assets-the
chance of a decline in asset value, typically measured by its market price.
Insurance risk - Primarily associated with possible dete
A. Based on the Treasury baseline data for a 10 year note, we chose to go with 3%
T-Bills and municipal bonds. the risk between these two securities is very similar
therefore the difference in yield we chose was only a 1% di
a) What is the Feds overall view of the current economy? Cite the different economic
indicators that the fed used to make their decision.
Through indicators such as household spending, inflation rates, and
Review topics for Exam 2
The topics on this sheet are to help you prepare for the exam. It is your
responsibility to know all the topics, concepts, and definitions covered in class
lectures and the PowerPoint slides.
Make sure to look at the su
For every position:
Baseball IQ/ Knowledge
Quick, strong arm, range (ability to cover a lot of space in a short amount of time), athletic,
accuracy, good hands/reaction time, plays the ball (ball doesnt play hi
Final Exam Take Home
Between AutoZone, and OReilly Automotive Inc the company with the higher cost of capital is
OReilly Auto. OReilly Auto had a 5.813% weighted average cost of capital compared to AutoZone which
had a 5.
Case #11 Question: 1
One major factor that lead to the failure of HMSI was the un-fair treatment of the
workers. Employees were expected to adhere to strict regulations. One example of this was
found with employees
YTM = 2.813% 2 = 5.63%
And the aftertax cost of debt is:
RB = (1 .35)(.0563) = .0366, or 3.66%
Now we have all of the components to calculate the WACC. The WACC is:
RWACC = .0366($5,250,000/$15,400,000) + .1270($10,150,000/$15,400,000) = .0962, or 9.62%
Mark X Company Strengths.
Current assets have gone up from 73.61% to 83.16% from 1990 to 1992.
Long term debt has decreased from 16.52% in 1990 to 12.39% in 1992.
DuPont Identity = Profit margin (income/sales) x Total asset turnover (Sales/assets) x
Basic Tax Calculation
A. GROSS ESTATE
$250,000 Life insurance payable
$5,600,000 Sole proprietorship
Total gross estate: $6,455,000
B. ADJUSTED GROSS ESTATE
Total gross esta
DIVISION OF PUBLIC HEALTH
Dennis G. Smith
1 WEST WILSON STREET
P O BOX 2659
MADISON WI 53701-2659
State of Wisconsin
Department of Health Services
To Whom I
COLA WARS IN CHINA: A FUTURE IS HERE
Wahaha like other companies who found difficulty in the soft drink industry
realized there will be barriers it had to overcome to beat out opponents like Coca Cola,
and Pepsi. Zong Qinghou the
Background Aspeon Sparkling Water
Aspeon Sparkling Water is water bottle manufacturing company that independently sells their
product through a wide variety of distributors in the United States. The CEO of the company
would like to avoid debt in its capit
Ch. 11 Risk Management
Risk Management in theory - The study of methods for controlling portfolio risk.
Risk Management in Practical Terms - The process by which we identify risks and control them
so that we are able to achieve individual goals.
Ch. 9 Real Estate and Other Assets
Unique physical characteristics
Factors of Affordability:
Liquid assets and debt accumulated
Ch. 8 Household Investments
Financial Assets - Those whose ownership is represented and traded solely through pieces of
Often maintain or increase in value over time, particularly when the cash they generate
Often fully marketable.
Ch. 13 Retirement Planning
Annuitization - A process of converting a lump-sum asset accumulated into the payment of a
fixed flow of income per year often based on life expectancy.
Defined Benefit Plans - Pension structures that provide a stated stream of
Ch. 12 Other Insurance
Business Risk - A risk taken for potential reward.
Coinsurance - Indicates that the policyholder pays a certain percentage of the outlay along with
the insurance company, often subject to an overall cap on payments by the holder.