Q2: Given the cash flow below, use Descarte's Rule and Norstrom's Criteria to check for the number of real i' and compute ROR using excel year Net cash flow -S100 1 -$20 $50 3 4 $60 5 -$30 6. $100

Q: Suppose you bought AirAsia stock maturing in December RM8 put options for 40 sen. What is the…

A: Solution:- Underlying asset means the asset from which the derivative is deriving its value.

Q: If POST is 1234 and FLIRT is 56784, what is FROST? 58234 58243 43285 52384

A: Data given: If POST = 1234 FLIRT=56784   Workings P=1 O=2 S=3 T=4 F=5 L=6 I=7 R=8 T=4

Q: A startup has received one round of funding. The deal with the venture capitalist gave the firm a…

A: Pre Money Valuation is $40 million Post Money Valuation is $60 million Under friendly strategy…

Q: Jasmine invested a certain amount in a bank compounded semi-anually. The bank told her that the…

A: First  we need to calculate the interest rate. Given,  Amount will be doubled in 5 years and it is…

Q: Which of the following are NOT the determinants of option prices? Select one: i. Average return ii.…

A: Solution: Option are one of the derivatives which grant a right to option holder to buy or sell the…

Q: The RBA decides to buy bonds and securities from commercial banks on the open market. Other things…

A: When RBA buys bonds in the open market, the money supply in the economy increases, as it buys…

Q: What is the value to an investor with a required return of 8.5%?

A: The value of the bond is the current price of the bond. It is the prevalent market price.

Q: Investing $19,000,000 in additional raw materials today, mostly in Uranium-235, should allow Teller…

A: Return on investment Return on investment is the net profit divided by total cost. It is calculated…

Q: 13-15. Mr. Sanchez owns 48 bonds with a par value of P1200 each and pays 9 3/4 % interest. What…

A: Bonds: Bonds are the liabilities of the company which is issued to raise the funds required to…

Q: Suppose TELSA's stock price is currently $20. A six-month call option on TELSA's stock with an…

A: One of the most fundamental concepts in current financial theory is the Black-Scholes model, often…

Q: Consider a call and a put options with the same strike price and time to expiry. Given that the…

A: The put-call parity: When the strike price on an underlying asset and the time to expiry are the…

Q: On April 5, Jessica had a balance due on her credit card of $927.85. From April 5 through May 4,…

A: Here, Previous Balance is $927.85 Additional Charges is $335.66 Payment is $700 Interest Rate per…

Q: 6. The U.S. manufacture sells the tools to a German company and has Euro receivable in 3 months. How…

A: Solution:- Futures means entering into an agreement to buy or sell something on a future date at the…

Q: Assume a stock has the following: Price today is $250 annual dividend of $3 Beta = 1.25 If you…

A: Last dividend = $3 Growth rate = 0.03 Discount rate = 0.0425 Fair value of stock = ?

Q: Melanie invests a total of $27,500 in two accounts paying 2% and 14% annual interest, respectively.…

A: Total investment = $27,500 First account interest rate = 0.02 Second account interest rate = 0.14…

Q: You are considering an investment in either individual stocks or a portfolio of stocks. The two…

A: Average return on a stock over a given number of years is the mean of yearly returns. That is,…

Q: The FC of asset is P710 000 while its salvage is P95 000. What is the depreciation charge during the…

A: Sum of digits  = 1+ 2 + 3 + 4 + 5 + 6 + 7 + 8+ 9 + 10 = 55 Third Year Depreciation  = ( Asset Value…

Q: How long will it take for an investment to increase by 139% its amount if money is worth 14% comp.…

A: Given, Amount will be 139% at the end of the period  So, Let's assume amount now is 100 amount at…

Q: ABC Corporation bought 5 short futures. The contract size is 10,000 shares of Mining Inc. The strike…

A: ABC Corporation bought 5 short futures. It means ABC is a Put Buyer.  The put Buyer will exercise…

Q: You want to invest PhP 1.5 million so that you will have an accumulated amount of at least PhP 2.5…

A: Simple interest is the interest earned on the same principal amount over successive periods.…

Q: XYZ Corp. entered into a long forward contract for 125 pieces of 1-ounce silver at a fixed price of…

A: A forward contract involves commitment to buy or to sell a certain commodity at a pre-determined or…

Q: 240,000 will be deposited in a fund at the beginning of each six months for 5 yrs. Using 11% as the…

A: Here the concept of annuity will apply. This is the case of an annuity due as the payments are made…

Q: A company has $20 billion of sales and $1 billion of net income. Its total assets are $10 billion.…

A: The net income of the company= $ 1,000,000,000 Tax rate=40% Total Assets = $10,000,000,000

Q: . The difference between the expected (c equired) return for the market portfolio ar he risk-free…

A: This pertains to the CAPM (capital asset pricing model). The difference between expected return on a…

Q: To create a fund of P1,000,000, how many deposits of P48,000 must be placed at the beginning of each…

A: Accumulated fund (AF) = P1,000,000 Monthly deposit (m) = P48,000 Monthly interest rate (r) = 0.005…

Q: you are a portfolio manager, and you get to select your pick of clients. Choose which sub-class…

A: 1. The client must be flexible & provide independence to the portfolio manager 2. The client…

Q: ABC Corp. agreed with the bank a P5,000,000 loan to be credited to ABC on May 1, 2022. The…

A: Forward rate agreement is an instrument used to hedge interest rate risk. FRA sets interest rate and…

Q: Which of the following situations are likely to reduce agency conflicts between stockholders and…

A: Agency conflicts arise due to the conflict between shareholders and managers with respect to the…

Q: At what discount rate does the following project have a positive NPV of exactly $1,000?

A: Net present value (NPV) of an alternative/project refers to the variance between the initial…

Q: The table below shows the bus fare (in rand), including 15% VAT, for a single trip. BUS FARE IN RAND…

A: Solution: Bus fare means the fare charged by the bus driver from its customers.

Q: 2. Discuss the advantages and disadvantages of credit. 3. Describe how most lenders in Kuwait…

A: (Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: VR-X issued 100,000 common stocks at par value of $12 to expand its business 3 years ago specialized…

A: The price of stock can be calculated based on the future dividends and can be calculated as the…

Q: K&K Manufacturing just issued a bond with a $1,000 face value and a coupon rate of 8.5%. If the bond…

A: Face value (FV)  = $1000 Coupon rate = 8.5% Coupon amount (C) = 1000*0.085 = $85 Years to maturity…

Q: Option Trading Strategies - Two Assets $40 Fist Asset Proft Second Asset Profit Total Profit - ie…

A: In case of a Long put, Payoff is Maximum of (exercise price - Stock price,0), I,e option is…

Q: There is an athletic organization named Jingle Jangle plans to invest P100,000 to host soccer game.…

A: If the expected value of money from investment is more than investment it would be considered as…

Q: Find the accumulated value of ₱ 5,000.00 in 3 ¼ years if it is invested at 15% compounded…

A: Accumulated value = P*(1+r/m)t*m Where P - Present value = P5,000.00 r - Interest rate = 15% m -…

Q: What amount would you have at age 65 if you contributed $260 a month starting today at age 25 and…

A: A series of continuous fixed payments at equal intervals for a number of periods is called annuity.…

Q: Private banking is the provision of wealth management services to high net worth individuals who…

A: High net-worth individuals are individuals having investible amounts exceeding a specified limit.…

Q: Explain what is financial ratio analysis?

A: Traders and investors use ratio analysis to assess a company's financial health by evaluating…

Q: b) How much total money will you put into the account? c) How much total interest will you earn? %24

A: As per the information provided :  Amount deposited = $400Interest rate = 6.8% interest compounded…

Q: Explain with examples how to measure exchange rate risk for long positions and short positions Notes…

A: Forex (Forex or FX) is the trading of one currency against another. For example, you can exchange US…

Q: Your father is about to retire, and he wants to buy an annuity that will provide him with $85,000 of…

A: Present Value:  The present value is the value of cash flow stream or the fixed lump sum amount at…

Q: 10. Assume the following data: Stock price = $50; Exercise price = $45; Risk-free rate = 6 percent…

A: One of the most fundamental concepts in current financial theory is the Black-Scholes model, often…

Q: John save Php 120 every quarter for 3 years earning 7% compounded monthly in a fund. How much will…

A: (1+i) = (1+i(12)/12)^12 (1+i) = (1+0.07/12)^12 (1+i) = 1.07229 i = 0.07229 = 7.23%

Q: An investment of $1,600,000 will return $320,000 per year for 6 years. Should the investment be…

A: Payback period refers to the time period within which a certain investment may be recovered. It is a…

Q: Find the accumulated value of ₱ 5,000.00 in 3 ¼ years if it is invested at 15% compounded…

A: Given,  Invested amount = 5,000 I/Y = 15/2 = 7.5% per semi annual N =3.25 *2 = 6.5 semi annuals

Q: Use the information below provided by Angel Baby Angel Company: Sales     8,250,000.00 Operating…

A: WACC (r) = 8% Total invested capital (C) = 24,875,000 Tax rate (T) = 40%

Q: The depreciation expense is generally estimated based on some assumption such as percentage of sales…

A: Depreciation can be defined as the reduction in the value of the asset over a period of time due to…

Q: help me answer these pleaseeee 6. The balance sheet showed the following: Total current assets…

A: A measure of a company's operational liquidity is known as net operating working capital. A higher…

Q: If the Fed makes a discount loan of $20 million to a commercial bank, the Fed's balance sheet will…

A: Answer-    Journal Entry for loan - Discount Bond Dr.     $20 million Bank Reserves.…

Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.