17. Liquidity risk is a chance that an investment cannot be easily liquidated: True False

Q: Bob wants $300,000 in his retirement account when he retires in 30 years. How much does he need to…

A: This question can be answered in light of future value of annuity. Annuity is a payment of equal…

Q: hich of the following provides information about how many months of living expenses you can cover…

A: Just like companies we also use financial ratios for a person to determine the state of financial…

Q: The company just paid a $1.48 annual dividend and announced the plans to pay $1.54 next year. The…

A: Constant and non-constant growth dividend model :  The main distinction between a constant and…

Q: Construct a table showing the amortization of the loan.

A: Amortization: It is the process of paying the loan amount in periodic payments by the borrower to…

Q: Professor Wendy Smith has been offered the following opportunity: A law firm would like to retain…

A: IRR is the rate at which the present value of cash inflows is equal to the present value of cash…

Q: Long Life Floors is expected to pay an annual dividend of $8 a share and plans on increasing future…

A: Value of stock is Sum of all dividend paid discounted at cost of capital

Q: Discuss why budgets are so important for all organizations. Describe some advantages and…

A: Budgets are an indispensable part of business organizations because they assist business…

Q: dividend yield on Abercrombie & Fitch stock wa

A: The dividend yield on Abercrombie & Fitch stock is identified from Yield Column I,e column 13

Q: . The average daily balance on Crandall's credit card is $4,637.23. His APR is 22%. What is his…

A: Annual percentage rate (APR) : It is rate of return calculated for 12 months return. It is given…

Q: X is the only daughter of the richest man in the Philippines. Her father and mother died in an…

A: The answer is option D. No, X is not yet the real owner of the properties of her parents so she…

Q: Suppose that a two-factor model, where the factors are the market return and the growth rate of…

A: With risk premium of factor 1 (RP1), risk premium of factor 2 (RP2), sensitivity of portfolio to…

Q: loan of $1000 is repaid by equal annual amounts of principal for 10 years and annual interest of 7%…

A: To construct Amortization Table, first we need to find out the annual repayment of the loan…

Q: Melvin availed a loan from a bank that gave him an option to pay Php 14,600 monthly for 2 years. Th-…

A: Present value of all monthly payments considering the interest rate and period of payment would give…

Q: Suppose that an investor has £1,000,000 to invest in a portfolio containing stocks A, B and a…

A: Objective: Portfolio of Stock A, Stock B and risk free asset Portfolio with expected return of 14%…

Q: Company A will pay a dividend at the end of each year at 150Php for the next 3 years for Stock A…

A: Share price: Share price is the current market price of the share. It is the price of the share at…

Q: Why might an investor prefer to invest directly rather than indirectly?

A: The reasons why the investors prefer to invest directly than indirectly are because: Control: It…

Q: Contemplating retirement an individual wants to create a fund on an 5% basis allowing $24,000.…

A: Balance on fund at the start to allow $24,000 annual withdrawal for 20 years is the present value of…

Q: The following three Fls dominate a local market and their total assets are given below. Institution…

A: In finance the HHI index is often used to determine the market concentration of an industry. FIs…

Q: The most important feature of Limited Liability Companies is that it provides limited liability for…

A: limited liability company benefits the members provide limited liability.

Q: You are considering a stock investment in one of two firms (LotsofDebt, Inc. and LotsofEquity,…

A: Ratio analysis is the method of checking the company's operational efficiency, liquidity, and…

Q: The Tamaraw Corporation is trying to determine the effect of its inventory turnover ratio and DSO on…

A: Answer -  Part 1 - Cash Conversion Cycle - Inventory conversion period + average collection period…

Q: Find the ending balance if the original balance was $425.32 and the following transactions occurred…

A: Each bank gives monthly statements to account holders giving them details of deposit made and…

Q: Determine the capitalized cost for an asphalt road that will require a construction cost of 10M, 50…

A: The following information has been provided in the question: Construction cost of asphalt road= 10M…

Q: An initial investment of $12,000 on an Artificial Intelligence (AI) powered cyber defense project is…

A: Net Present Value is the difference between present value of cash inflows and cash outflows. At IRR,…

Q: If we have an inflation ratio (f) of 5.0% and a market interest (i) of 1.0%, how much is the…

A: A market interest rate is also called market nominal rate. This rate does not take account of…

Q: Using the tables provided, if an investment is made now for $19,200 that will generate a cash inflow…

A: Given, The investment is $19,200 Cash inflow is $6,400. Rate is 10%

Q: hy is it important to understand financial statem

A: Financial statement are representation of the performance of company and are show how is company…

Q: Bostian, Inc. has total assets of $520,000. Its total debt outstanding is $185,000. The Board of…

A: Debt-to- asset ratio is the percentage of the debt with respect of total asset   Debt-to-assets…

Q: Assume BBB stock price is currently $20. In each six-month period, it will either fall by 50 percent…

A: Asset price $20.00 Strike price $15.00 Time/step,  1.00 yrs Risk free rate, r 5% for 6 Months

Q: the standard deviation for part c are all wrong. could you please check it again?

A:

Q: 13. What was the principal for a continuously compounded account earning 2.1% interest that now has…

A: A Continuous Compounded Interest rate is the interest rate that is calculated on the principal…

Q: Suppose the current 1-year discount rate on US government bonds is 3% and the 2- year rate is at 6%.…

A: 1 year rate (r1) = 3% 2 year rate (r2) = 6% Let 1 year rate next year = i

Q: The following information pertains to Havana Corporation's defined benefit pension plart 2021 2022…

A: We can calculate the service cost in the year 2021 by applying the required formula by taking the…

Q: Advanced Products is considering the purchase of a computer-aided manufacturing system that requires…

A: Solution:- Accounting Rate of Return means the percentage of increase in net income per year to the…

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A: Both the expected shortfall and VAR are the measures of risk level.

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A: The answer for this question can be calculated in the light of time value of money. Time value of…

Q: When choosing the appropriate group of risk factors to include in a multifactor Arbitrage Pricing…

A: APT model is essentially an asset pricing model that is based on multiple factors. The model is…

Q: parity, suppose that inflation in the Japan ncreases by 30% and inflation in U.S. ncreases by 10%.…

A: Purchasing power parity is based on extension and variation of prices.

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A: This is a question involving the application of time value of money. The time value of money can be…

Q: Where did global financial crisis begin?

A: After the great depression of 1930 the global financial crisis was seen in 2007-2008 based on…

Q: the amount you need to save each month

A: given   fv=25000 n= 5*12=60 interest i = 3.5% PMT =?

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A: Collections in a month = (0.65 * Current month sale) + (0.15 * Last month sale) + (0.15 * month…

Q: Critically discuss the CAMELS ratings and its effectiveness in banking regulation.

A: A bank is a type of financial institution that can accept deposits and provide loans. Wealth…

Q: EXPLAIN THE ADVANTAGE OF offshore trust?

A: Offshore trust is the planning tool to protect your assets, This trust is created in abroad, It is…

Q: Oscar was given a credit card with an APR of 21%. What was his monthly periodic rate? A. 21% B. 2.1%…

A: APR is annual rate of return calculated considering 12 months credit  period. To calculated monthly…

Q: 3. Carl has an account with $73,000 that earns 1.25% interest compounded monthly. Find the amount of…

A: This question can be solved in light of annuity and future value. A fixed sum of money is to be…

Q: The expected constant-growth rate of dividends is ______% for a stock currently priced at $76, that…

A: We need to use constant growth model to calculate growth rate P0 =D0(1+g)r-g where P0=current market…

Q: Mr. Kamal wishes to accumulate Rs. 120,000 by the end of 5 years to meet educational expenses of his…

A: Compound interest with principal (A) = P x [1 + (r / n)](n x t) Principal = the present value of…

Q: expected return of 20% and a beta of 1.4, and the risk-free rate is 8%, how much money will she…

A: Portfolio Return: It is computed by the sum of individual returns of the portfolio security that…

Q: Should Ghana go back to the IMF to borrow to finance its expenses?

A: Analysis of the Ghana's economic woes in 2015: i) High current account and budget deficit ii) High…

Loanable Funds Theory

The loanable funds theory is a neoclassical theory that determines the interest rate where the demand for loanable investments and supply of loanable funds intersect. To determine the interest rate, this theory employs linear regression and a demand curve. At the equilibrium point, demand for borrowings and demand for the issuance of borrowing funds are inextricably linked. This point of equilibrium should equalize demand and the supply of money available for borrowing.