Requirements: Develop a ten-year sales projection assuming the growth as below:

1. 1% for 2^nd year
2. 3% for 3^rd to 5^th year
3. 8% for 6^th to 10^th year

M/S. Marutham Investment Bond 2013 was issued in January 2014, with a maturity period of 2 years. With a Coupon payment of 7% per annum made every 6 months with a Face value of Rs.100. What is the YTM for the bond, if the prevailing market price was Rs. 84 as at January 2014?

Homework (Submit in groups)
You are 20 and plan to work for 45 years until you retire at 65. You expect to live until you are 90.
You will collect a pension. Your annual pension payment will be equal to your final salary times a 3% crediting rate times the number of years that you work.
Your starting salary (paid at the end of the year) is $40,000. You expect to get a 4% annual raise.
Your discount rate is 5%.

Draw a timeline and Identify:
• Annual salary payment
• Time of retirement
• Annual pension payment
• Value of pension at retirement
• Value of pension today

ECON 315 / Money, Banking and Financial Markets

1. During the financial collapse in the U.S. beginning in 2008, several bond rating agencies were accused of overstating the quality of the assets they were rating. It was also revealed that these agencies had close working relationships with the firms they rated. Briefly explain what sorts of problems arise because of this relationship.

2. Consider the “Five Cs” of business lending. Define three of them and give your own example.

3. Explain the difference between adverse selection, information asymmetry and moral hazard. Describe each and provide at least one example.

4. Describe the Efficient Market Hypothesis. What implications does it have on the market?

Consider the following information: –

On the FOREX market, an American bank gives the following quotes

€:$ = 1.2010-1.2060

₤:$ = 1.7960-1.8010 –

A British bank gives the following quote: ₤:€ = 1.5060-1.5080 Is there an arbitrage opportunity? Why or why not? If yes, what is the arbitrage profit? Use $1,000,000.

Please show all work will rate 5 stars thank you!

1.Knight, Inc., has issued a three-year bond that pays a coupon of 6.09 percent. Coupon payments are made semiannually. Given the market rate of interest of 5.92 percent, what is the market value of the bond? (Round answer to 2 decimal places, e.g. 15.25.)
2.Ruth Hornsby is looking to invest in a three-year bond that makes semiannual coupon payments at a rate of 13.59 percent. If these bonds have a market price of $952.22, what yield to maturity and effective annual yield can she expect to earn? (Round answer to 2 decimal places, e.g. 15.25%.)

3.Rudy Sandberg wants to invest in four-year bonds that are currently priced at $841. These bonds have a coupon rate of 5.98 percent and make semiannual coupon payments. What is the current market yield on this bond? (Round answer to 2 decimal places, e.g. 15.25%.)
4.The International Publishing Group is raising $10 million by issuing 15-year bonds with a coupon rate of 8.49 percent. Coupon payments will be made annually. Investors buying the bonds today will earn a yield to maturity of 8.49 percent. At what price will the bonds sell in the marketplace? Explain. (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25.)

5.Nanotech, Inc., has a bond issue maturing in seven years that is paying a coupon rate of 7.52 percent (semiannual payments). Management wants to retire a portion of the issue by buying the securities in the open market. If it can refinance at 10.25 percent, how much will Nanotech pay to buy back its current outstanding bonds? (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25.)

2. Consider the following quotes:

Yen per Pound: 256

Yen per dollar: 180

Dollar per pound: 1.5

Suppose 1 million dollars invested Is there any possibility of triangular arbitrage? Why or why not? If yes, what is the arbitrage profit? Use $1,000,000.

Please show all work will rate 5 stars thank you!

1) You are considering an investment that will pay you $12,000 the first year, $13,000 the second year, $17,000 the third year, $19,000 the fourth year, $23,000 the fifth year, and $28,000 the sixth year (all payments are at the end of each year). What is the maximum you would be willing to pay for this investment if your opportunity cost is 11%?

Solve this question assuming that payments will be received at the beginning of each year rather than the end of each year. Please solve using Excel

In a minimum of 200 words or more, describe the issues regarding the validity of LIBOR rate before and during the financial crisis.(please i need 200 words, thank you)

What does it mean to say that a buyer has a right, not an obligation?

Opportunity cost of capital. Explain why we refer to the opportunity cost of capital, instead of just “cost of capital” or discount rate”. While you’re at it, also explain the following statement: “The opportunity cost of capital depends on the proposed use of cash, not the source of financing”.

Present values. Lofting Snodbury is considering investing in a new boring machine. It costs $380,000 and is expected to produce the following cash flows:

If the cost of capital is 12%, what is the machine’s NPV?

Amortizing loans. Suppose that you take out a $200,000, 20-year mortgage loan to buy a condo. The interest rate on the loan is 6%, and payments on the loan are made annually at the end of each year.

1. What is your annual payment on the loan?

2. Construct a mortgage amortization table in Excel similar to Table 2.1, showing the interest payment, the amortization of the loan, and the loan balance for each year.

3. What fraction of your initial loan payment is interest? What about the last payment? What fraction of the loan has been paid off after 10 years? Why is the fraction less than half?

A 60-year old person buys a 25-year term annuity in arrears contract for a single upfront premium of $1,000,000. Interest earnt by the insurance company is assumed to be 5% over the first 10 years of the contract and then 4% for the remaining term. The amount paid in the first 10 years is two-thirds of the amount paid in the remaining 15 years. Find out the amount paid in year 1 of the contract.

Assume that select mortality applies and there is an annual fee of $20 which is paid at the time of the annuity payment