Chapter 8 Integrative Problem Assume that you recently graduated with a major in finance‚ and you just landed a job in the trust department of a large regional bank. Your first assignment is to invest $100‚000 from an estate for which the bank is trustee. Because the estate is expected to be distributed to the heirs in approximately one year‚ you have been instructed to plan for a 1-year holding period. Furthermore‚ your boss has restricted you to the following investment alternatives‚ shown
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CHAPTER 1 Goals and Governance of the Firm Answers to Problem Sets 1. a. real b. executive airplanes c. brand names d. financial e. bonds f. investment g. capital budgeting h. financing 2. c‚ d‚ e‚ and g are real assets. Others are financial. 3. a. Financial assets‚ such as stocks or bank loans‚ are claims held by investors. Corporations sell financial assets to raise the cash to invest in real assets such as plant and equipment. Some
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a. Cash is a financial asset because it is the liability of the federal government. b. No. The cash does not directly add to the productive capacity of the economy. c. Yes. d. If the economy is already operating at full capacity‚ and you now command the additional purchasing power provided by the 10 billion‚ then your increased ability to purchase goods must be offset by a decrease in the ability of others to purchase goods. Thus‚ the other individuals in the economy can be made worse off by
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Chapter 4 1. If you invest $1000 today at an interest rate of 10% per year‚ how much will you have 20 years from now‚ assuming no withdrawals in the interim? SOLUTION: n PV FV PMT Result 20 2. i 10 1000 ? 0 FV =6‚727.50 a. If you invest $100 every year for the next 20 years‚ starting one year from today and you earn interest of 10% per year‚ how much will you have at the end of the 20 years? b. How much must you invest each year if you want to have
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End of chapter revision questions for the mid term exam Rose Ch5 Questions 3‚ 6‚ 7 Ch 6 Questions 4‚ 5‚ 9 Rose Ch 17 Questions 7‚ 8 Ch 12 Questions 3‚ 6 5-3. If you know the following figures: |Total Interest Income |290 |Provision for Loan Loss |10 | |Total Interest Expense |205 |Income Taxes |15 | |Total Noninterest Income |27 |Dividends to
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Schedule for Stat 21‚ Fall 2013 Note: Chapter readings are from FPP‚ and SG refers to Professor Philip Stark’s free online text SticiGui. “notes by RP” indicates Professor Roger Purves’ notes on chance variables‚ which will be posted on Canvas later. Week 1 (8/29): • Reading:chapters 3‚ 4; SG 3‚ 4 • Histograms‚ measures of location and spread‚ first look at Markov and Chebyshev Week 2 (9/3‚ 9/5) • Reading: chapters 5‚ 8‚ 9; SG: 6‚ 7‚8 • Finish chapter 4 • Normal curve‚ normal approximation
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ROLE AND PURPOSE This subject aims to introduce to students a range of basic concepts and ideas in modern finance. After completing this subject‚ participants should know the principles involved in making investment and financing decisions‚ understand functions of financial markets and financial managers‚ and possess basic knowledge of option pricing and financial planning. This foundation course prepares students for more in‐depth studies at a later stage. LEARNING OUTCOMES Upon completion of the
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CHAPTER 6: EFFICIENT DIVERSIFICATION 1.E(rP) = (0.5 16%) + (0.4 10%) + (0.10 6%) = 12.6% 2.a.The mean return should be less than the value computed in the spreadsheet. The fund’s return is 5% lower in a recession‚ but only 3% higher in a boom. The variance of returns should be greater than the value in the spreadsheet‚ reflecting the greater dispersion of outcomes in the three scenarios. b.Calculation of mean return and variance for the stock fund: (A) (B) (C) (D) (E) (F) (G) Scenario Probability
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CHAPTER 12: BEHAVIORAL FINANCE AND TECHNICAL ANALYSIS PROBLEM SETS 1. Technical analysis can generally be viewed as a search for trends or patterns in market prices. Technical analysts tend to view these trends as momentum‚ or gradual adjustments to ‘correct’ prices‚ or‚ alternatively‚ reversals of trends. A number of the behavioral biases discussed in the chapter might contribute to such trends and patterns. For example‚ a conservatism bias might contribute to a trend in prices as
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Part 2 – Public Expenditure: Public Goods and Externalities Chapter 4 – Public Goods 1. a. Wilderness area is an impure public good – at some point‚ consumption becomes nonrival; it is‚ however‚ nonexcludable. b. Satellite television is nonrival in consumption‚ although it is excludable; therefore it is an impure public good. c. Medical school education is a private good. d. Television signals are nonrival in consumption and not excludable (when broadcast over the air). Therefore‚ they
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