2. Your brother, who is 6 years old, just received a trust fund that will be worth $21,000 when he is 21 years old. If the fund earns 0.11 interest compounded annually, what is the value of the fund today? Round to two decimal places.
3. If you were to borrow $9,300 over five years at 0.10 compounded monthly, what would be your monthly payment? Round to two decimal places
4. A dollar to be received in the future is worth more than a dollar in hand today?
A. True
B. False
5. Use the following information to calculate your company's expected return
State Probability Return
Boom 20% 0.34
Normal 60% 0.10
Recession 20% -0.16
Round to two decimal places
ANSWER:
6. You have invested 30 percent of your portfolio in Jacob, Inc., 40 percent is Bella Co., and 30 percent in Edward Resources. What is the expected return of your portfolio if Jacob, Bella and Edward have expected returns of 0.02, 0.14 and 0.17, respectfully? Round to two decimal places.
7. A project has the following cash flows:
0 1 2 3
($500) $140.00 $200 $290.00
What is the project's NPV if the interest rate is 6%. Round to two decimal places.
8. Christopher Electronics brought new machinery for $5,150,000 million. This is expected to result in additional cash flows of $1,225,000 million over the next 7 years. What is the payback period for this project? Their acceptance period is five years. Round to two decimal places.
2
Future value = present value*(1+ rate)^time |
21000 = Present value*(1+0.11)^15 |
Present value = 4389.09 |
Please ask remaining parts seperately, questions are unrelated |
2. Your brother, who is 6 years old, just received a trust fund that will be...
You have invested 30 percent of your portfolio in Jacob Inc., 40 percent in Bella Co., and 30 percent in Edward Resources. What is the expected return of your portfolio if Jacob, Bella, and Edward have expected returns of 0.07, 0.19, and 0.03, respectfully
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Simone is now 50 years old and plan to retire at age 67 (in 17 years). She currently has a share portfolio worth $750,000, a superannuation fund worth $1,200,000, and a money market (similar to cash) account worth $500,000. Her share portfolio is expected to provide annual returns of 12% p.a. (compounded annually), her superannuation will earn her 9% p.a. (compounded annually), and the money market account earns 1.2% p.a. (compounded monthly). Assume all these returns are aftertax. Assume Simone’s...
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a rate of 8%. The probability distribution of the risky funds is as follows: Expected Return 19% Standard Deviation 31% 23 Stock fund (S) Bond fund (B) 14 The correlation between the fund returns is 0.10. a-1. What are the investment proportions in the...
A pension fund manager is
considering three mutual funds. The first is a stock fund, the
second is a long-term government and corporate bond fund, and the
third is a T-bill money market fund that yields a rate of 8%. The
probability distribution of the risky funds is as follows:
Expected Standard Deviation Return Stock fund (S) Bond fund (B) 17% 30% 22 11 The correlation between the fund returns is 0.10 a-1. What are the investment proportions in the...