Katy Chan has inherited $100 000 from her aunt. She wants to invest the money for one year after which she will go on a trip to Egypt with the return on investment (i.e., she wants to save the $100 000 and spend the return). She wants to maximize the return on her one-year investment. Katy is considering the following options:
Suppose that Katy has the following utilities:
u(20 000) = 1 |
|
u(13 500) = 0.9 |
|
u(12 000) = 0.8 |
|
u(3 500) = 0.6 |
|
u(−5 000) = 0 |
Katy Chan has inherited $100 000 from her aunt. She wants to invest the money for...
Natalie received a gift of $1 000 from her grandmother. She decides to invest the money into a trip she wants to take when she graduates from college three years from now. What annual rate of return does she have to have to accumulate $1 250 by the time of her graduation? Select one: a. 7.9% b. 7.7% c. 12.5% d. 9.2% e. 8.4%
6) Jennifer has $36500 to invest. She wants to invest her money into three companies "A", "B" and "C" with the following ratios 2/5: 3/8: 1/4. a. How much should she invest in company "B"? (2 marks) b. How much (how many more dollars) should Jennifer increase her investment on company "A" if she decides to invest 20% more on company "C" keeping the ratios the same. (2 marks)
Granny Smith wants her money to be safely invested. She decides to invest her money in the lowest risk securities available and thus, she invests in short term Treasury bonds. She wants to have money saved up for a family trip in 2 years and wants to give her granddaughter some money for college in 3 years. The inflation rate is to be 4% next year, 5% the following year and 6% in the third year. Maturity risk is .1%...
A. Ms. Simwami has K40 000 in her margin account and she wants to use the money to buy shares of the ABC company. The initial margin requirement is 40% and ABC's stock price is currently k50. Ignore taxes, commissions and interest on the amount borrowed. If the maintenance margin is 30%, at what price would she receive a margin call from her broker? [8 Marks]
A young graduate engineer wants to know how much money she will need to invest each year into a uniform series sinking fund in order to accumulate an equivalent future worth of $3,000,000 at the end of 35 years in an investment account that tracks the S&P 500, which has an historical Rate of Return (ROR) of approximately 9% (25-year average-1926 to present) not accounting for inflation.
Sandra Chan, 22, has just moved to Winnipeg to begin her first professional job. She is concerned about her finances and, specifically, wants to save for a “rainy day” and a new car purchase in two years. In order to finance her move, Sandra had put aside some money. Now that her move is finished, Sandra has $1000 remaining in her chequing account at the bank. Sandra is unsure if she should put this money aside in a “rainy day”...
Terry Zupita is considering how to invest the modest amount of money she recently inherited ($48,000). Based on her knowledge of different types of investments, as well as the advice of friends, Terry thinks that she should invest her inheritance in a long-term U.S. Treasury bond that promises to pay her $3,690 interest every 6 months for 10 years. However, today at lunch, Terry asked her best friend Mike how he would invest the money. Mike responded that he thought...
Terry Zupita is considering how to invest the modest amount of money she recently inherited ($48,000). Based on her knowledge of different types of investments, as well as the advice of friends, Terry thinks that she should invest her inheritance in a long-term U.S. Treasury bond that promises to pay her $3,690 interest every 6 months for 10 years. However, today at lunch, Terry asked her best friend Mike how he would invest the money. Mike responded that he thought...
1. Bella is 23 years old and wants to invest money for her retirement. She wants to have $2,000,000 saved up when she retires at age 65. a) If she can earn 10% per year in an equity mutual fund, calculate the amount of money she would have to invest in equal annual amounts to achieve her retirement goal. b) Alternatively, how much would she have to invest in equal monthly amounts starting at the end of the current year...
17) Ted recently inherited a large sum of money that he wants to invest in the stock market. Since he has no investment experience, he has decided that he would like to work with a professional who can explain the market to him and also manage his funds for him. Ted most likely needs the services offered by an): a) deep-discount broker. b) discount broker. c) full-service broker. d) online broker. e) cyberbroker. 1) The DJIA is an index of...