RESIT 2018 version F.pdf

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Uploaded by Anonymous User at 2019-04-06
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Resit 2018

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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?
0,11*29/(43-13)=0.1063
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 :)
thanksss!