You are a Derivatives Trader at a major Broker-Dealer. At the end of the week you need to calculate and submit several capital ratios for the performance of your business. You consolidate all trading activity across counterparties and asset types. You are deploying standardized metrics to calculate Risk Weighted Assets (RWA). Below are the standardized risk weights for various asset types:

i. Cash, US Treasuries (0%)

ii. US Bank issued paper and FHA, Fannie Mae, Freddie Mac issued paper (20%)

iii. Corporate bonds, notes and other corporate liabilities (100%)

iv. Structured Securities (100%)

v. Other paper (100%)Your holdings book/balance sheet looks as follows:

Cash=$400K, T-Bills=$20M, Verizon Bonds=$25M, East-West Imports Promissory Note=$5M, Uncollateralized Derivatives with JP Morgan=$250M, fully Collateralized (US Treasury collateral) Derivatives with JPMorgan=$50M, CRE Senior Note=$30M. Your weekly Net P&L=$8M. Calculate

1) RWA

2) Return on RWA

Recalculate (1) and (2) in case the US Treasury collateral in the collateralized trades with JPMorgan is

replaced with Mortgage collateral.

Suppose that 20 monthly payments of $100 each are followed by 30 monthly payments of $200 each. If the interest is at an effective monthly rate of 0.5%, what is the accumulated value of the series at the time of the final payment?

A stock has a required return of 10%, the risk-free rate is 4.5%, and the market risk premium is 2%.

1. What is the stock's beta? Round your answer to two decimal places.
2. If the market risk premium increased to 6%, what would happen to the stock's required rate of return? Assume that the risk-free rate and the beta remain unchanged. Do not round intermediate calculations. Round your answer to two decimal places.
   1. If the stock's beta is equal to 1.0, then the change in required rate of return will be less than the change in the market risk premium.
   2. If the stock's beta is greater than 1.0, then the change in required rate of return will be greater than the change in the market risk premium.
   3. If the stock's beta is less than 1.0, then the change in required rate of return will be greater than the change in the market risk premium.
   4. If the stock's beta is greater than 1.0, then the change in required rate of return will be less than the change in the market risk premium.
   5. If the stock's beta is equal to 1.0, then the change in required rate of return will be greater than the change in the market risk premium.

   Stock's required rate of return will be ____ %.

Charming Paper Company sells to the 12 accounts listed here.   
  

    
Capital Financial Corporation will lend 90 percent against account balances that have averaged 30 days or less, 80 percent for account balances between 31 and 40 days, and 70 percent for account balances between 41 and 45 days. Customers that take over 45 days to pay their bills are not considered acceptable accounts for a loan.
    
The current prime rate is 16.50 percent, and Capital charges 4.50 percent over prime to Charming as its annual loan rate.

a. Determine the maximum loan for which Charming Paper Company could qualify.
  

  
  
b. Determine how much one month’s interest expense would be on the loan balance determined in part a. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
  

1. Given the following information, determine the beta coefficient for Stock L that is consistent with equilibrium: r^L = 9.5%; r_RF = 2.5%; r_M = 10.5%. Round your answer to two decimal places.

2. You have been managing a $5 million portfolio that has a beta of 1.35 and a required rate of return of 8.075%. The current risk-free rate is 2%. Assume that you receive another $500,000. If you invest the money in a stock with a beta of 1.65, what will be the required return on your $5.5 million portfolio? Do not round intermediate calculations. Round your answer to two decimal places. %?

3. A mutual fund manager has a $20 million portfolio with a beta of 2.4. The risk-free rate is 2.5%, and the market risk premium is 9%. The manager expects to receive an additional $5 million, which she plans to invest in a number of stocks. After investing the additional funds, she wants the fund's required return to be 25%. What should be the average beta of the new stocks added to the portfolio? Negative value, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to one decimal place.

The Ivanhoe Department of Transportation has issued 25-year bonds that make semiannual coupon payments at a rate of 10.075 percent. The current market rate for similar securities is 11.3 percent. Assume that the face value of the bond is $1,000. Suppose the bond were to mature in 12 years.

What will be the bond’s price if rates in the market (i) decrease to 9.30 percent or (ii) increase to 12.3 percent?

(i) Bond's price if rate decrease to 9.30 percent

(ii) Bond's price if rate increase to 12.3 percent

Assume the canadian spot rate is 1.18C$/US$, the swiss franc spot rate is 1.29CHF/US$ and the market cross rate is 1.11CHF/C$

A. Calculate the implied cross rate of CHF/C$.

B. Calculate the triangular profit. Assume you have US $1,000 to work with. State the currencies you need to buy and sell in order to earn the arbitrage profit   

Simon recently received a credit card with a 15% nominal interest rate. With the card, he purchased an Apple iPhone 7 for $360.53. The minimum payment on the card is only $10 per month.

1. If Simon makes the minimum monthly payment and makes no other charges, how many months will it be before he pays off the card? Do not round intermediate calculations. Round your answer to the nearest whole number.

     month(s)

2. If Simon makes monthly payments of $35, how many months will it be before he pays off the debt? Do not round intermediate calculations. Round your answer to the nearest whole number.

     month(s)

3. How much more in total payments will Simon make under the $10-a-month plan than under the $35-a-month plan. Do not round intermediate calculations. Round your answer to the nearest cent.

   $  

The Utah Mining Corporation is set to open a gold mine near Provo, Utah. According to the treasurer, Monty Goldstein, “This is a golden opportunity.” The mine will cost $2,700,000 to open and will have an economic life of 11 years. It will generate a cash inflow of $375,000 at the end of the first year, and the cash inflows are projected to grow at 8 percent per year for the next 10 years. After 11 years, the mine will be abandoned. Abandonment costs will be $430,000 at the end of Year 11. a. What is the IRR for the gold mine? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. The Utah Mining Corporation requires a return of 10 percent on such undertakings. Should the mine be opened? Yes No

You are interested in buying a house and renting it out. You expect to receive a monthly net income of $1,500 from rent. You then expect to sell the house for $300,000 at the end of 60 months. If your discount rate on this investment is 0.8% per month, what is this property worth to you today? Assume that you receive rent at the beginning of each month and you receive the first rent the same day you purchase the property. Round to the nearest cent. ​[Hint: Notice that the interest rate provided is monthy, so this is i/m. Also, 60 months is nxm.]

A C corporation earns $10 per share before taxes. After it has paid taxes, it will distribute the rest of its earnings as dividends. The dividend is income to you, so you will pay taxes on these earnings. The corporate tax rate is 40% and your personal dividend tax rate is 15%. How much of the earnings remain after all taxes are paid?

SOLVE MULTIPLE CHOICE, PLEASE SHOW STEP BY STEP SOLVING

a.) $0.90 b) $ 4.00 c) $6.00 d) $5.10

suppose you took out a fully amortized $30,000 automobile loan to finance your purchase over 48 months at an APR of 3.5%. So far, you have made two years of payments in a timely fashion so the next payment will be your 25th. what percentage of the next payment will be allocated toward reducing the outstanding balance on the loan and what percentage will be interest?