Homework Answers
1- True
because a required rate of return means minimum rate of return required on investment a required rate of return is positively related to value of asset.
2-Annual real rate of return = nominal rate-inflation rate
7%-3% = 4% or .04
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6.25 points Save Answer QUESTION 8 The value of financial assets is positively related to the...
QUESTION 8 6.25 points Save Answer The value of financial assets is positively related to the...
QUESTION 8 6.25 points Save Answer The value of financial assets is positively related to the required rate of return. O True False 6.25 points Save Answer QUESTION 9 A year ago, you invested $1,000 in a savings account that pays an annual interest rate of 7%. What is your approximate annual real rate of return if the rate of inflation was 3% over the year? 0.04 O.10 o.07 o.06
QUESTION 10 6.25 points Save Answer BC stock for $30/share four months ago. How much were...
QUESTION 10 6.25 points Save Answer BC stock for $30/share four months ago. How much were you able to You purchased A sell yourstock for today if your annualized holding period yield is-15%? Round intermediate steps to four decimals and your final answer to two decimals. Do not use the dollar sign when inputting your answer. 6.25 points Save Answe QUESTION 11 Inflation has no bearing on the real risk-free rate. n True False
QUESTION 16 6.25 points Save Answer Suppose that you purchased 1,000 shares of stock for $45/share...
QUESTION 16 6.25 points Save Answer Suppose that you purchased 1,000 shares of stock for $45/share three months ago. Find your geometric mean return if you sell all your shares today for $38/share. .0548 .4915 O- 1556 O-3978
QUESTION 2 10 points Save Answer Which of the following is not an example of a...
QUESTION 2 10 points Save Answer Which of the following is not an example of a tangible asset? Aircraft O Property, plant and equipment Real estate Corporate bond QUESTION 3 10 points Save Answer True or False: For every financial instrument there is a minimum of two parties - the party that has agreed to make future cash payments is typically called the Issuer or the Borrower or the Obligor and the party that owns the financial instrument is called...
Click Submit to complete this assessment Question 30 uestion 30 2 points Save Answ Bob deposits...
Click Submit to complete this assessment Question 30 uestion 30 2 points Save Answ Bob deposits $100 in a bank account that pays an annual the money was deposited, then Bob's purchasing power has increased by 3 percent interest rate of 5 percent. A year later, Bob withdraws his $105. If inflation was 2 percent during the year O True O False à Click Submit to complete this assessment « Question 30 of 30 8
6.25 points Sav QUESTION 1 You've noticed that inflation has increased from 1/1/2014 to 1/1/2015. If...
6.25 points Sav QUESTION 1 You've noticed that inflation has increased from 1/1/2014 to 1/1/2015. If the market is in equilibrium, which of the following is true regarding the required rate of return for potentialinvestments today (8/22/2016) O Today's required rate of return will increase due to the rise in inflation. OToday's required rate of return will decrease due to the rise in inflation. O Today's required rate of return will be unaffected by the increase in inflation. O Cannot...
QUESTION 15 6.25 points Save Answe An analyst has developed the following forecast for the overall...
QUESTION 15 6.25 points Save Answe An analyst has developed the following forecast for the overall economy and the returns for a particular stock State Boom Moderate Growth Flat Probability .25 .40 .15 Return .35 .15 .08 Bust 20 -.25 Find the coefficient of variation O 2.6642 1.8513 O.5402 O 2027
QUESTION 14 6.25 points Save Answer ABC stock has the following probability distribution and expected year-end...
QUESTION 14 6.25 points Save Answer ABC stock has the following probability distribution and expected year-end prices: State Probability 25 4 35 Year-end Price $50 $60 $70 2 If you purchase the stock today for $55/share and you expect it to pay a dividend of $4/share, what is you expected holding period yield over the course of the year? Hint: If dividends are paid, HPY- [(ending price+dividends)/beginning price]-1 0.1818 O.1091 O-.0328 O0984
Tom Cruise Lines Inc. issued bonds five years ago at $1,000 per bond. These bonds had...
Tom Cruise Lines Inc. issued bonds five years ago at $1,000 per bond. These bonds had a 30-year life when issued and the annual interest payment was then 14 percent. This return was in line with the required returns by bondholders at that point as described below: Real rate of return Inflation premium Risk premium 3% 6 5 14% Total return Assume that five years later the inflation premium is only 2 percent and is appropriately reflected in the required...
QUESTION 29 3 points 3 points Save Answer Save Answer happens when there is a decrease...
QUESTION 29 3 points 3 points Save Answer Save Answer happens when there is a decrease in the overall price level. QUESTION 30 3 points Save Answer This morning in the supermarket, you found an old shopping list in your wallet and the receipt from the last year for all the things on the list. You wanted to do a quick economics experiment so you bought everything on the list again for $122. The receipt says that on the same...
QUESTION 8 6.25 points Save Answer The value of financial assets is positively related to the required rate of return. O True False 6.25 points Save Answer QUESTION 9 A year ago, you invested $1,000 in a savings account that pays an annual interest rate of 7%. What is your approximate annual real rate of return if the rate of inflation was 3% over the year? 0.04 O.10 o.07 o.06
QUESTION 10 6.25 points Save Answer BC stock for $30/share four months ago. How much were you able to You purchased A sell yourstock for today if your annualized holding period yield is-15%? Round intermediate steps to four decimals and your final answer to two decimals. Do not use the dollar sign when inputting your answer. 6.25 points Save Answe QUESTION 11 Inflation has no bearing on the real risk-free rate. n True False
QUESTION 16 6.25 points Save Answer Suppose that you purchased 1,000 shares of stock for $45/share three months ago. Find your geometric mean return if you sell all your shares today for $38/share. .0548 .4915 O- 1556 O-3978
QUESTION 2 10 points Save Answer Which of the following is not an example of a tangible asset? Aircraft O Property, plant and equipment Real estate Corporate bond QUESTION 3 10 points Save Answer True or False: For every financial instrument there is a minimum of two parties - the party that has agreed to make future cash payments is typically called the Issuer or the Borrower or the Obligor and the party that owns the financial instrument is called...
Click Submit to complete this assessment Question 30 uestion 30 2 points Save Answ Bob deposits $100 in a bank account that pays an annual the money was deposited, then Bob's purchasing power has increased by 3 percent interest rate of 5 percent. A year later, Bob withdraws his $105. If inflation was 2 percent during the year O True O False à Click Submit to complete this assessment « Question 30 of 30 8
6.25 points Sav QUESTION 1 You've noticed that inflation has increased from 1/1/2014 to 1/1/2015. If the market is in equilibrium, which of the following is true regarding the required rate of return for potentialinvestments today (8/22/2016) O Today's required rate of return will increase due to the rise in inflation. OToday's required rate of return will decrease due to the rise in inflation. O Today's required rate of return will be unaffected by the increase in inflation. O Cannot...
QUESTION 15 6.25 points Save Answe An analyst has developed the following forecast for the overall economy and the returns for a particular stock State Boom Moderate Growth Flat Probability .25 .40 .15 Return .35 .15 .08 Bust 20 -.25 Find the coefficient of variation O 2.6642 1.8513 O.5402 O 2027
QUESTION 14 6.25 points Save Answer ABC stock has the following probability distribution and expected year-end prices: State Probability 25 4 35 Year-end Price $50 $60 $70 2 If you purchase the stock today for $55/share and you expect it to pay a dividend of $4/share, what is you expected holding period yield over the course of the year? Hint: If dividends are paid, HPY- [(ending price+dividends)/beginning price]-1 0.1818 O.1091 O-.0328 O0984
Tom Cruise Lines Inc. issued bonds five years ago at $1,000 per bond. These bonds had a 30-year life when issued and the annual interest payment was then 14 percent. This return was in line with the required returns by bondholders at that point as described below: Real rate of return Inflation premium Risk premium 3% 6 5 14% Total return Assume that five years later the inflation premium is only 2 percent and is appropriately reflected in the required...
QUESTION 29 3 points 3 points Save Answer Save Answer happens when there is a decrease in the overall price level. QUESTION 30 3 points Save Answer This morning in the supermarket, you found an old shopping list in your wallet and the receipt from the last year for all the things on the list. You wanted to do a quick economics experiment so you bought everything on the list again for $122. The receipt says that on the same...
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