1. Suppose a bank enters a repurchase agreement in which it agrees to buy Treasury securities from a correspondent bank at a price of $34,950,000, with the promise to buy them back at a price of $35,000,000.

a. Calculate the yield on the repo if it has a 5-day maturity.

b. Calculate the yield on the repo if it has a 16-day maturity. (For all requirements, use 360 days in a year. Do not round intermediate calculations. Round your answers to 5 decimal places. (e.g., 32.16161))

2. Suppose you purchase a T-bill that is 130 days from maturity for $9,710. The T-bill has a face value of $10,000.

a. Calculate the T-bill’s quoted discount yield.
b. Calculate the T-bill’s bond equivalent yield.

(For all requirements, use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161))
  

Briefly describe the functions of insurers in rate making, underwriting and loss adjustment. Which is the most important? Explain your answer.

Consider the following two cash flow series of payments: Series A is a geometric series increasing at a rate of 4% per year. The initial cash payment at the end of year 1 is $1,000. The payments occur annually for 5 years. Series B is a uniform series with payments of value X occurring annually at the end of years 1 through 5. You must make the payments in either Series A or Series B. Click here to access the TVM Factor Table Calculator Your answer is incorrect. Try again. Determine the value of X for which these two series are equivalent if your TVOM is i = 6%. $ Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±5. Your answer is incorrect. Try again. If your TVOM is 8%, would you be indifferent between these two series of payments? Enter the PW for each series to support this choice. PW, Series A: $ PW, Series B: $ Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±5%. Your answer is incorrect. Try again. If your TVOM is 5%, would you be indifferent between these two series of payments? Enter the PW for each series to support this choice. PW, Series A: $ PW, Series B: $ Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±5.

When would you advise an owner or manager of more than one trading business to trade under a single ABN umbrella? 80-100 words

(must be related in Australia)

The information below provides details of an off-exchange tailor-made loan obtained by Royal Oceania Cruises to fund their operations.

• Today is June 30 2019, which is the initiation date of the loan.

• The Commonwealth Bank is loaning money to Royal Oceania Cruises.

• The amount borrowed is $50 million.

• The maturity date of the loan is three years.

• A minimum interest payment of $1 million is due in each financial year. The financial

  year ends on 30 June each year.

• The nominal interest rate associated with this loan is the Reserve Bank of Australia

  cash rate (as at June 30 2019) plus a margin of 3.75%. This interest rate is compounded monthly and is fixed from the initiation date.

  Assume the following payments are made by Royal Oceania Cruises during the term of the loan:

• Monthly repayments of $2 million at the end of each month beginning on January 31 2020 until April 30 2021 (inclusive).

• May 31 2021: a single payment of $2 million.

• April 30 2022: a single payment of $10 million.

  Given such payments, your job is to determine the outstanding value of the loan on the maturity date.

Assume that a radiologist group practice has the following cost structure:

a. What is the group’s breakeven point in volume?

b. Complete the following table. (Hint: total costs= fixed costs + (variable cost per procedure x procedures)

c. Sketch out a breakeven graph depicting the BE point. (Hint: use Excel to produce the graph. When done, copy/paste the graph on the space provided below).

For the most recent year, Camargo, Inc., had sales of $570,000, cost of goods sold of $249,870, depreciation expense of $64,900, and additions to retained earnings of $77,300. The firm currently has 24,500 shares of common stock outstanding and the previous year’s dividends per share were $1.52. Assuming a 24 percent income tax rate, what was the times interest earned ratio?

Suppose you and your husband have decided that when you retire in 15 years you want to take a trip around the world for a year. You realize that you need to begin saving now for this trip of a lifetime. You want to be able to deposit annually (end of year payments) a fixed amount in an interest bearing account. It is estimated that monthly after that you will need to withdraw $5000 monthly for spending money. You will make the down payment at year 15 and the monthly payments will begin the first month after year 15 and will go for 12 months. How much must you deposit annually to be able to pay for these expenses. Assume 6% interest annual rate with monthly compounding.

Song earns $100,000 taxable income as an interior designer and is taxed at an average rate of 20 percent (i.e., $20,000 of tax). Answer the questions below assuming that Congress increases the income tax rate such that Song's average tax rate increases from 20 percent to 25 percent.  

a. What will happen to the government’s tax revenues if Song chooses to spend more time pursuing her other passions besides work in response to the tax rate change and therefore earns only $75,000 in taxable income?

• Government's tax revenues would decrease by $1,250

• Government's tax revenues would increase by $1,250

• Government's tax revenues would decrease by $1,500

• Government's tax revenues would increase by $1,500

• Government's tax revenues would remain unchanged

b. What is the term that describes this type of reaction to a tax rate increase?

• Price effect

• Endowment effect

• Substitution effect

• Budget constraint

• Income effect

c. What types of taxpayers are likely to respond in this manner?

• Taxpayers with less disposable income

• Taxpayers with more disposable income

Rebecca is interested in purchasing a European call on a hot new​ stock, Up, Inc. The call has a strike price of $ 99.00 and expires in 94 days. The current price of Up stock is $ 116.59​, and the stock has a standard deviation of 39 % per year. The​ risk-free interest rate is 6.39 % per year. Up stock pays no dividends. Use a​ 365-day year.

a. Using the​ Black-Scholes formula, compute the price of the call. b. Use​ put-call parity to compute the price of the put with the same strike and expiration date. ​(Note​: Make sure to round all intermediate calculations to at least five decimal places.​) ​

Roslin Robotics stock has a volatility of 28 % and a current stock price of $ 64 per share. Roslin pays no dividends. The​ risk-free interest is 5 %.

Determine the​ Black-Scholes value of a​ one-year, at-the-money call option on Roslin stock.

Suppose that Ally Financial Inc. issued a bond with 10 years until​ maturity, a face value of $ 1,000​, and a coupon rate of 6 % ​(annual payments). The yield to maturity on this bond when it was issued was 5 %.

a. What was the price of this bond when it was​ issued? b. Assuming the yield to maturity remains​ constant, what is the price of the bond immediately before it makes its first coupon​ payment? c. Assuming the yield to maturity remains​ constant, what is the price of the bond immediately after it makes its first coupon​ payment?