RESIT 2018 version F.pdf

Uploaded by Anonymous User at 2019-04-06

Resit 2018

How do we solve these 2? Thanks
19) 0=-350+25/(r-0.02) for Kimjong and 0=-350+50/r for Trumpie, calculate it and you'll see that B is correct. 20) -350+25/(r-0.02)=-350+50/r and you'll get to C.
For Trumpie, to find the 50 how do you do? I though it was 25/0.05 but I get 500
need to use the Rwacc formual= e/D+E*Re+D/E+D*Rd*(1-tc) => 0.06=0.5*Re+0.5*0.03*(1-0.35)=C
We need the CPN in order to apply the formula, but how do we know the number of coupon payments?
CPN= [ coupon rate* face value]/ no. of coupon payments per year.. so unless mentioned otherwise it will be one per year. Hence, CPN = [0.06*1000]/1= 60
How do we solve this one???
You have the strike price for both of your options which is 105$, you have the information that the stock price is 110$. Therefore, you can get that one of your option is in-the-money and the other one is out-of-the-money. Due to the fact that the stock price is higher than your strike prices, your call is the one in-the-money, and obviously the Put is out-of-the-money
what did you just say...
I don't get it
How do you compute this?
Take one of the YTMs given and solve for x using the formula : YTMn=[ (FV/P)^1/n ] -1For eg. : 0.0480=[(1000/x)^1/5 ] -1
you need to use the formula FV/1+ytm^N so 1000/1.048^5 =791.03 => C
Does anyone by any chance know how to solve this question? D:
The question is wrong. The correct answer is the following: NPV= 290/(0.075-0.05)/1.075^4 - (3000+3000/1.075+3000/1.075^2) = 299.39 *1000 = approximately 300,000 The discount rate Re is found using CAPM.
When I calculated I found none of them, The FV of the 30y is 905,302.8 and What we can pay back is 750,000 ( 25,000*30) Where is my mistakes? ( answer is a)
It is already answered in other comments :)
I used this formula: p= CPN/Y * (1-1/(1+y)^n)+FV/(1+y)^n and I get 100.05 I don't know what's the problem? ( answer is d)
I used another formula but I don't know if it is in the book: Price of a bond = (Coupon rate * FV) * ((1-(1+YTM)^-t)/YTM) + (FV/(1+YTM)^t) This gives: (0.06*1000) * ((1-(1.08)^-30)/0.08) + (1000/(1.08)^30) = 774.84
I don't understand this, can someone explain?
You just have to calculate the price for a zero-coupon bond for 29 years and for 30 years then see the difference between the 2 prices. FV/(1+YTM)t you get for 29 years: 107.33 & for 30 years: 99.38 The difference between the 2 prices is closest to 8
How do we know its D so investment C that has the highest return?
you have to use the EAR formula to calculate all of them then you will see it the anwser is D
How do you do this?
Thank you!
Can someone explain these two?
Can someone explain these 2?
How do you calculate this?
Here, with the word forever you know that is a perpetuity so it is: NPV = -Investment + PV(Perpetuity) 0 = -Investment + 1,500/0.05 --> Investment = 30,000 Now, you want to know for how many years so you just divide your investment by the cash flow -> 30,000/1,500 = 20
Does someone know how to solve this one?
(1000/1.1) + (3000/1.1^2) + (9000/1.1^3) + (5000:1.1^4) + (2000/1.1^5) = 14807.17 (Answer A)
How would you calculate the bond yield to maturity?
You cannot calculate it here, but you have the information that even though the company paid a coupon of 5€, the price of the bond went up. However, when the YTM increases, it usually causes the price of the bond to go down. (Nonetheless, here you can get that answer C is the right one)
Thanks Singer
I don't get this one can someone explain me how (s)he did it?
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Cuz you don't calculate it the correct way lol
Got it now :/ ahaha
Can someone explain please ? The correct answer is B)
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= 37,500*
True my bad ahah :/
Can someone explain please?
I don't get how to find answer B). Can someone explain ?
Hey Lucie. What we do here is a Future Value calculation for which we use the following Forumla: FV=PV*(1+r)^n. Our FV is 2000, PV 1000 and r is 5%. Thus, we get to 2000=1000*1,05^n. We can simplify this to 1,05^n=2, then apply the logarithm and get no n= ca.14,2. Hope this helps you :)