Suppose an investor buys a call option on 45,000 barrels of oil with an exercise price of $51 per barrel and simultaneously sells a put option on 45,000 barrels of oil with the same exercise price of $51 per barrel. Her net payoff per barrel on these option contracts is _____ if the market price per barrel is $49 and _____ if the price per barrel is $55.

Josh and his new wife Samantha are buying their first house together. They secured a loan for $435,000 at a rate of 9.275% per year for 30 years.

SHOW FORMULAS USED

1)How much are the monthly payments?

2)6 years later, the couple decides they want to refinance their home. How much do they currently owe on the home?

3)The bank is offering a special deal of 6.35% on all home refinances. What would their new monthly payment be?

4)The couple is saving money for their first child. Now that they have refinanced their home, how much will the couple save every month?

5)The couple has made significant upgrades to their home which is currently valued at $575,000. Based on how much they owe at the time of refinance, how much equity do they have?

Gentry Can Company's (GCC) latest annual dividend of $1.25 a share was paid yesterday and maintained its historic 8 percent annual rate of growth. You plan to purchase the stock today because you believe that the dividend growth rate will increase to 9 percent for the next three years and the selling price of the stock will be $46 per share at the end of that time.

A: How much should you be willing to pay for the GCC stock if you require a 12 percent return? Do not round intermediate calculations. Round your answer to the nearest cent.

B: What is the maximum price you should be willing to pay for the GCC stock if you believe that the 9 percent growth rate can be maintained indefinitely and you require a 12 percent return? Do not round intermediate calculations. Round your answer to the nearest cent.

C: If the 9 percent rate of growth is achieved, what will the price be at the end of Year 3, assuming the conditions in Part b? Do not round intermediate calculations. Round your answer to the nearest cent.

A stock is currently priced at $35.00. The risk free rate is 3.2% per annum with continuous compounding. In 4 months, its price will be either $39.90 or $31.15.

Consider the portfolio with the following: long a European call with strike $39.00 expiring in 4 months; a short futures position on the stock with delivery date in 4 months and delivery price $40.00; a derivative which pays, in 4 months, three times the price of the stock at that time.

Using the binomial tree model, compute the price (or "value") of this portfolio.

Assume that a bank has assets located in Germany worth €210 million earning an average of 9 percent. It also holds €130 in liabilities and pays an average of 7 percent per year. The current spot rate is €1.50 for $1. If the exchange rate at the end of the year is €2.00 for $1:

a. What happened to the dollar? Did it appreciate or depreciate against the euro (€)?
b. What is the effect of the exchange rate change on the net interest margin (interest received minus interest paid) in dollars from its foreign assets and liabilities?
c. What is the effect of the exchange rate change on the value of the assets and liabilities in dollars?

As a business owner, financial decisions require careful planning and prioritizing, especially when large, capital-intensive purchases are involved. As you establish a process to achieve your company goals, you will need to demonstrate your math skills, consider different investment options, and describe how different investment vehicles can be used effectively to accomplish business goals.

You, as a small business owner, are interested in buying a lot for $38,000. You have a CD (certificate of deposit) worth $40,000 now, which earns 4% compounded annually and will mature in 3 years. You are thinking about cashing in the CD to purchase the lot, but cashing in the CD now means you will have to pay a withdrawal penalty of $500. You project the value of the lot will be $45,000 in 3 years and you intend to use it for immediate equipment storage purposes for your business.

For your main post, you will write an essay discussing what you, as a business owner, decide to do - buy or pass on purchasing the lot. In your essay you should address the following:

• Calculate how much your CD will be worth upon maturity.
• Explain the differences (pros and cons) between these two investment options.
• Prioritize and select the best option for your business and explain why that option is preferable.
• Discuss the potential impact this choice will have on the future of your business.

The Bruin Stock Fund sells Class A shares that have a front-end load of 4.90 percent, a 12b-1 fee of 0.40 percent, and other fees of 1.24 percent. There are also Class B shares with a 5 percent CDSC that declines 1 percent per year, a 12b-1 fee of 1.85 percent, and other fees of 1.24 percent. Assume the portfolio return is 9 percent per year.

a. What is the value of $1 invested in each share class if your investment horizon is 3 years? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

b. What if your investment horizon is 20 years? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

You are considering an investment in a mutual fund with a 5% front-end load and an expense ratio of 1.25%. You can invest instead in a bank CD paying 7% interest.

a. If you plan to invest for two years, what annual rate of return must the fund portfolio earn for you to be better off in the fund than in the CD? Assume annual compounding of returns. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

b. If you plan to invest for six years, what annual rate of return must the fund portfolio earn for you to be better off in the fund than in the CD? Assume annual compounding of returns. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

c. Now suppose that instead of a front-end load the fund assesses a 12b-1 fee of 1.50% per year. What annual rate of return must the fund portfolio earn for you to be better off in the fund than in the CD? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

the direct quote for the dollar in frankfurt is 0.6896-912. the direct quote for euro in new york is?

The Bigbee Bottling Company is contemplating the replacement of one of its bottling machines with a newer and more efficient one. The old machine has a book value of $650,000 and a remaining useful life of 5 years. The firm does not expect to realize any return from scrapping the old machine in 5 years, but it can sell it now to another firm in the industry for $280,000. The old machine is being depreciated by $130,000 per year, using the straight-line method. The new machine has a purchase price of $1,175,000, an estimated useful life and MACRS class life of 5 years, and an estimated salvage value of $155,000. The applicable depreciation rates are 20%, 32%, 19%, 12%, 11%, and 6%. It is expected to economize on electric power usage, labor, and repair costs, as well as to reduce the number of defective bottles. In total, an annual savings of $240,000 will be realized if the new machine is installed. The company's marginal tax rate is 35%, and it has a 12% WACC.

a)What initial cash outlay is required for the new machine? Round your answer to the nearest dollar. Negative amount should be indicated by a minus sign.

b)Calculate the annual depreciation allowances for both machines and compute the change in the annual depreciation expense if the replacement is made. Round your answers to the nearest dollar.

Year Old Depreciation Allowance, New Depreciation Allowance, Change in Depreciation

c) What are the incremental net cash flows in Years 1 through 5? Round your answers to the nearest dollar.

d) Should the firm purchase the new machine?

Banks sometimes quote interest rates in the form of “add-on interest.” In this case, if a 1-year loan is quoted with an interest rate of 14.5% and you borrow $1,000, then you pay back $1,116. But you make these payments in monthly installments of $93 each.

a. What is the true APR on this loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Use a financial calculator or Excel.)

b. What is the effective annual rate on the loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Short answers:

1. Assets you own, including such items as stocks, bonds, or real estate, are commonly termed ______________________________.
2. Health insurance that provides payments to the insured in the event that the insured's income is interrupted by illness, sickness, or accident is called _____________________ insurance.
3. Using the earnings multiple approach, how much life insurance would you need to generate a 20-year $62,400 annuity given a discount rate of 5 percent.

I NEED ALL OF THE QUESTIONS PLEASE!!!!!!!!

1) A 20-year bond pays a coupon of 8 percent per year (coupon paid semi-annually). The bond has a par value of $1000. What will the bond sell for if the nominal YTM is: a) 10 percent b) 6 percent c) 8 percent

An investor is given the five investment alternatives (1, 2, 3, 4 and 5) with the following characteristics: Asset Expected Return Standard Deviation of Returns 1 20.0 percent 40.0 percent 2 14.0 percent 30.0 percent 3 16.0 percent 30.0 percent 4 12.0 percent 25.0 percent 5 18.0 percent 35.0 percent Which of the following statements best describes the rational investor's investment decision? a. A rational investor would never prefer Asset 4 in isolation. b. A rational investor would never prefer Asset 3 in isolation. c. A rational investor would never prefer Asset 1 in isolation. d. A rational investor would never prefer Asset 5 in isolation. e. A rational investor would never prefer Asset 2 in isolation.