1. Suppose that the current price of gold is $1,734 per oz and that it costs $5 per oz per month to store gold (payable monthly in advance). Suppose also that the term structure is flat with a continuously compounded rate of interest of 6% for all maturities.
   1. Calculate the forward price of gold for delivery in three months.
   2. If the current forward price for gold is $1,775.36 per oz, is there arbitrage opportunity? If so, please explain why there is an arbitrage opportunity and what position (long or short) you would take on the forward market (you do not need to show how to exploit the arbitrage opportunity if any, just say if you would buy or sell forward).

(can you please put the formula you use before plugging the numbers in so i can get clarity because different approaches is what is getting me confused, thank you.

Stock FBN is selling at 60. The risk-free rate is 4 percent per period. Each period, the stock price can either go up by 10 percent or down by 10 percent.

Fill in the price sequence as listed below, labeling each stock price and the 65 put values for an American put. (Draw out the tree first to help your calculations, of course. And copy-paste the price sequence to your answer space so you can just fill it in)

S₀ = 60

P₀ =

_________

S_u =

S_d =

P_u =

P_d =

_________

S_uu =

P_uu =

S_ud =

P_ud =

S_dd =

P_dd =

Describe in your own words why you believe hospitals spend money on marketing and whether you think what they buy is effective or not.

• Your initial post should have a minimum of one hundred and fifty (150) words.
• Answer two (2) other classmates with a minimum of 25 words

Thank you so much

Please show all work.

Assume a par value of $1,000. Caspian Sea plans to issue a 16.00 year, annual pay bond that has a coupon rate of 8.05%. If the yield to maturity for the bond is 7.76%, what will the price of the bond be?

Assume a par value of $1,000. Caspian Sea plans to issue a 20.00 year, annual pay bond that has a coupon rate of 7.85%. If the yield to maturity for the bond is 8.37%, what will the price of the bond be?

Assume a par value of $1,000. Caspian Sea plans to issue a 25.00 year, annual pay bond that has a coupon rate of 11.00%. If the yield to maturity for the bond is 11.0%, what will the price of the bond be?

Answer format: Currency: Round to: 2 decimal places.

SGS Golf Academy is evaluating different golf practice equipment. The "Dimple-Max" equipment costs $105,000, has a 5-year life, and costs $9,700 per year to operate. The relevant discount rate is 11 percent. Assume that the straight-line depreciation method is used and that the equipment is fully depreciated to zero. Furthermore, assume the equipment has a salvage value of $23,500 at the end of the project’s life. The relevant tax rate is 35 percent. All cash flows occur at the end of the year. What is the EAC of this equipment?

A firm is considering an investment in a new machine with a price of $18.06 million to replace its existing machine. The current machine has a book value of $6.06 million and a market value of $4.56 million. The new machine is expected to have a four-year life, and the old machine has four years left in which it can be used. If the firm replaces the old machine with the new machine, it expects to save $6.76 million in operating costs each year over the next four years. Both machines will have no salvage value in four years. If the firm purchases the new machine, it will also need an investment of $256,000 in net working capital. The required return on the investment is 11 percent and the tax rate is 35 percent.

What is the NPV of the decision to purchase a new machine? (Enter your answer in dollars, not millions of dollars. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 1,234,567.89.)
  
NPV           $

What is the IRR of the decision to purchase a new machine? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
  
IRR             %

What is the NPV of the decision to purchase the old machine? (A negative answer should be indicated by a minus sign. Enter your answer in dollars, not millions of dollars. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 1,234,567.89.)
  
NPV           $
  
What is the IRR of the decision to purchase the old machine? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. A negative answer should be indicated by a minus sign.)

a. Steve and Jackson have $4,000 to deposit in a money market fund earning 5%. If they add $2,000 to that account annually, how much will they have accumulated in 15 years? (Show all work.)

b. Carey has $2,000 for a down payment on a vehicle and she can afford monthly payments of $400. She wants to finance a vehicle over no more than 4 years. If lenders are currently offering loans at 6 percent interest, what is the maximum price Judy can pay for a vehicle?

c. Pat would like to know the monthly payments and the total finance charges on the following 2 loans: (Show all work.)

A.. $30,000, 9%, 36 months
B. $30,000, 9%, 48 months

d. Your mortgage payment is $1,500 per month. Of this amount, insurance is $50, property taxes are $200, and interest is about $1,100. Assuming you have other itemized deductions that already exceed your standard deduction and that you are in the 31% marginal tax bracket, what is the reduction in your tax liability as a result of owning a home with this mortgage. (Show all work.)

"Bond Yields [LO2] West Corp. issued 25-year bonds two years ago at a coupon rate of 5.3 percent. The bonds make semiannual payments. If these bonds currently sell for 105 percent of par value, what is the YTM?"

A firm can lease a truck for 5 years at a cost of $45,000 annually. It can instead buy a truck at a cost of $95,000, with annual maintenance expenses of $25,000. The truck will be sold at the end of 5 years for $35,000. The cost of capital is 15%. What is the EAC of Purchase?

"Interest Rate Risk [LO2] Bond J has a coupon rate of 3 percent. Bond K has a coupon rate of 9 percent. Both bonds have 14 years to maturity, make semiannual payments, and have a YTM of 6 percent. If interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds? What if rates suddenly fall by 2 percent instead? What does this problem tell you about the interest rate risk of lower-coupon bonds?"

Risk and Rates of Return: Security Market Line Risk and Rates of Return: Security Market Line The security market line (SML) is an equation that shows the relationship between risk as measured by beta and the required rates of return on individual securities. The SML equation is given below: ​ If a stock's expected return plots on or above the SML, then the stock's return is a)insufficient/sufficient? to compensate the investor for risk. If a stock's expected return plots below the SML, the stock's return is b)insufficient/sufficient? to compensate the investor for risk. The SML line can change due to expected inflation and risk aversion. If inflation changes, then the SML plotted on a graph will shift up or down parallel to the old SML. If risk aversion changes, then the SML plotted on a graph will rotate up or down becoming more or less steep if investors become more or less risk averse. A firm can influence market risk (hence its beta coefficient) through changes in the composition of its assets and through changes in the amount of debt it uses.

Quantitative Problem: You are given the following information for Wine and Cork Enterprises (WCE): rRF = 5%; rM = 7%; RPM = 2%, and beta = 1.2

What is WCE's required rate of return? Round your answer to 2 decimal places. Do not round intermediate calculations. %

If inflation increases by 2% but there is no change in investors' risk aversion, what is WCE's required rate of return now? Round your answer to two decimal places. Do not round intermediate calculations. % Assume now that there is no change in inflation, but risk aversion increases by 1%.

What is WCE's required rate of return now? Round your answer to two decimal places. Do not round intermediate calculations. %

If inflation increases by 2% and risk aversion increases by 1%, what is WCE's required rate of return now? Round your answer to two decimal places. Do not round intermediate calculations. %

You are evaluating two different milling machines to replace your current aging machine. Machine A costs $266,735, has a three-year life, and has pretax operating costs of $64,279 per year. Machine B costs $395,418, has a five-year life, and has pretax operating costs of $32,757 per year. For both milling machines, use straight-line depreciation to zero over the project’s life and assume a salvage value of $40,798. Your tax rate is 34 % and your discount rate is 10 %.

What is the EAC for Machine A? (Round answer to 2 decimal places. Do not round intermediate calculations)

You are evaluating two different milling machines to replace your current aging machine. Machine A costs $271,107, has a three-year life, and has pretax operating costs of $71,215 per year. Machine B costs $400,129, has a five-year life, and has pretax operating costs of $31,750 per year. For both milling machines, use straight-line depreciation to zero over the project’s life and assume a salvage value of $44,650. Your tax rate is 34 % and your discount rate is 10 %.

What is the EAC for Machine B? (Round answer to 2 decimal places. Do not round intermediate calculations).

Why does the Statement of Net Assets differentiate the restricted net assets from unrestricted net assets?

What can you say about NPV with respect to project valuation (As an alternative to IRR)? When are projects valuable as measured by NPV?