Finance

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Can someone elaborate on dark pool? Don't really know that is.
does someone know the difference between CML and SML? or in particular about Q56 first sit 2017. Why is this answer wrong "The straight line that connects all possible combinations of expected return and std. dev for all possible portfolios consisting of the stock and the savings account is the CML" ?
The CML is the capital market line. It is the line that shows all possible combinations between the MARKET portfolio and risk-free assets like bonds or savings accounts. It has the highest sharp ration, implying that it gains the most excess return per unit of risk. However the SML (security market line) is the graphical representation of the CAPM, thus being a regression showing how much expected return a stock should get based on its sensitivity/beta.
thanks a lot!
Q&A: Any problems or questions while studying Finance? Don't worry, we got your back! Just post any of your questions in the finance course on Studydrive https://www.studydrive.net/courses/maastricht-university/finance/222 and our experienced tutors will help you! Much success with your exams Your Success Formula Team
Q20 of 2017 first sit?
This is a screenshot from the succes formula crash course, could anyone help me with the calculations?
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Thank you so much!
You are very welcome!
What about Q29,Q30,Q34?
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30.) The coupon bond pays a coupon of 5%, clearly lower than the yield to maturity of 10,4%. This implies that the bond is sold at discount. Cash inflows are coupon payments of 50 (take coupon rate * Face Value / # payments per year) and the Face Value We get 50 each year for 5 years, and 1000 at year 5, thus we can use the annuity formual for the 50$ each year: 50/0.104*(1-1/1.104^5)+1000/1.104^5 = 797.37 Closest to 750 ANSWER D
34.) To find the Stock price after the dividend drop to 1.50$, we need to find the cost of equity based on the prior years stock price and dividend payment: Use the dividend discount model for infinite growth ( dividend/(cost of equity - growth rate) 2,5/(X - 0.04) = 25 ---> X = 0.14 Thus, 1,5/(0,14 - 0,08) = 25$ ANSWER B
How do you calculate Q13,Q20 and Q25?
25.) Profitability Index = PV( cash inflow)/ PV (cash outflow) Thus PV( Cash inflow) --> 4000/0,15 * (1 - 1/1,15^4) = 11.419 PV(Cas outflow) --> 10.000 PI = 11.419/10.000 = 1.14 --> 14% is the profitability of the project over its initial investment ( 14% is the percentage change ) ANSWER A
13.) You need to apply the APR to EAR transformation, since the EAR incorporates the compounding effect. calculation: investment i. --> 20.000 * 1,07^5 = 28.051 investment ii. --> 20.000 * ((1+ 0,07/2)^2)^5 = 28.211 ---> EAR is calculated by taking (1 + APR/k)^k where k is the number of payments per anno investment iii. --> 20.000 * (e^0.07)^5 = 28.381 ---> for continuous interest we need to take e^interest rate ANSWER C
Anybody who knows how to calculate Q22 of the first sit of 2017 version U?
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Thank you so much!
You are so welcome!
Does anybody know how to calculate Q45 of the first sit of 2017? Thanks! :)
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thank you!
You´re welcome!
How do you calculate Q13 and Q18?
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18.) Here you need to know three formulas : the dividend yield, the capital gain and the total return. Further they tell us that the rental yield is calculated one on one like the dividend yield, so the rent of 150.000 is treated like a dividend. dividend yield = dividend/price in year 0 capital gain = (price in year 1 - price in year 0) / price in year 0 ---> just a percentage change calculation total return = dividend yield + capital gain Calculation: 150.000/2.000.000 = 0.075 (1.175.000 - 2-000-000) / 2.000.000 = -0.4125 0.075 -0.4125 = -0.3375 ANSWER A
But the answer is 28300€...
How do you calculate Q14 & Q17 of the first sit of 2017?
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No worries :) thats what we are here for!
Nice & keep it up ;)
Does someone know how to calculate Q45 of the first sit of 2017? I get 7% every time but its not right
For this exercise we need the WACC, to find the cost of debt. To remember, the WACC uses the firms financial distribution of debt and equity as weights for the cost of equity and cost of debt. Calculation: E/(E+D) * cost of equity + D/(E+D) * cost of debt * (1-tax rate) = Rwacc 280/(280+93) * 0.09 + 93/(280+93) * X * (1 - 0.6) = 0.073 Solve for X --> 93/(280 + 93) * X * 0.6 = 0,073 - 280/(280+93) *0.09 -----> 93/(280 + 93) * X * 0.6 = 0.00616 93/(280 + 93) * X = 0.00616 / 0,6 ----> 93/(280 + 93) * X = 0,0103 X = 0,0103 / 93/(280 + 93) -----> X= 0,041 cost of debt is around 4% ANSWER A
Does someone know how to calculate Q35 of the first sit of 2017? Thanks in advance ;)
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why don't you have to take 7/(1,12)^2 since its two years?
As explained above, the perpetuity that we use to derive at 7$, is discounting one year only! Thus we have 7$ share price in year 1 not year 2.
Could anyone explain why the awnser to Q43 is A and not C in the first sit of 2017?
The idea behind this question is to show you the effect of diversification. To understand it, you need to know that if stocks move together they will exhibit a positive correlation (if they move 1:1, thus identically they have a correlation of 1). If the stock have a high correlation, the effect of diversification will be very small, leading to almost no decrease in risk. Since the variance is used to measure risk (square root of variance is the volatility ---> risk), the variance will be very high for two a two stock portfolio with highly correlated stocks, since we do not diversify greatly. We can conclude: with more movement together comes high correlation and thus a bigger variance
Can someone explain me how to calculate Q24 of the first sit of 2017?
You start with -100, in year one you get +40 and in year 2 you get +50. so combined thats +90, you still need 10 to be fully re-paid. In year 3 your cash flow is 60 , 60/12 = 5 so you need two months to get the 10 in order to have your investment back. With the payback rule you do not need to take any kind of rate into account so the best anwser is 2.2 years.
For this exercise you need to find the time period it takes for the project to payback its initial investment. Thus we want to know how long it take to have our cash inflows being equal to our cash outflow of 100. Calculation: After year 1: 40 $ of cash inflow --> we still need 60 more to break even After year 2: 90 $ of cash inflow --> we still need 10 more Thus we need 10 more dollars from the total cash flows of year 3, to have paid back. This means we need only 10 out of 60 dollars. Considering that we will get 60 over a year, therefore 10 dollars every 2 months, we need to transform months into years: 2/12 (every 2 months 10 dollars, thus we only need 2 more month to break even) ---> simplify ---> 1/6----> 0,167 We can conclude: It takes 2 years and 2 months to pay back, which is the same as 2,167 years --> closest to 2,2 ANSWER D
Q38 Shouldn't it be 100$, otherwise B) is wrong?
Yes, the course coordinator admitted that it should have been $100 and counted all answers correct
anyone knows when the grades should be online?
max. 15 working days (as usual)
people doing the assignment do you know where to post it? I can't find the safe assign on the Student portal
He send an e-mail saying you must send it to the regular e-mail address
course coordinator just dropped an email about this
Is there a difference between the free cash flow method and the discounted free cash flow method or is it the same? they ask in the course assignment to use the free cash flow method to value a company and its stock price, which one should I use?
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ok thank you very much anonymous vigilante <3
FCF gives you the yearly cash flows. DCF is discounting them to a present value of the enterprise. Subtract the debt and add the cash to enterprise value, and you have the market value. Divide by shares outstanding gives you share price.
any complaints for the exam?
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agree on 16 but someone needs to file a complaint for all those 4
16 and 21 probably not....
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