Suppose that the current 1-year rate (1-year spot rate) and expected 1-year T-bill rates over the following three years (i.e., years 2, 3, and 4, respectively) are as follows: 1R1 = 2.54%, E(2r1) = 3.80%, E(3r1) = 4.30%, E(4r1) = 5.80% Using the unbiased expectations theory, calculate the current (longterm) rates for 1-, 2-, 3-, and 4-year-maturity Treasury securities. Plot the resulting yield curve.

An interest rate collar has a cap strike rate of 10.00% and a floor strike rate of 9.50%. If the reference interest rate moves from 9.50% to 9.75%, what is the effective rate of the collar? a. 9.50% b. 9.625% c. 9.75% d. 9.875%

A company is considering buying a new bottle-capping machine. The initial cost of the machine is $325,000 and it has a 10-year life. Monthly maintenance costs are expected to be $1200 per month for the first 7 years and $2000 per month for the remaining years. The machine requires a major overhaul costing $55,000 at the end of the 5th year of service. Assume that all these costs occur at the end of the appropriate period. What is the future value of all the costs of owning and operating this machine if the nominal annual interest rate is 7.2%?

Pl show all the forumalas to get a thumbs-up.

The New York downtown is planning to develop a piece of land and three mutually exclusive projects were proposed. A playground with 4 years of project life, a swimming pool with 5 years of project life and a volleyball court with 6 years of project life. All three projects each have initial capital costs of $200 and annual net benefits of $140, $120, $110 respectively. Assuming a 10% cost of capital, how would you rank them?

Excel format would be the best

International Business Opportunities

With a rationalization of why you would go to Germany to do business, evaluate the competitive environment within the country.

Which one would you rather have:

a) The future value of $5,000 per year for 10 years to be given to you in year 10 (that is 10 years from now) when the interest rate is 6%?

b) The present value of $12,500 per year from year 11 to year 35 when the interest rate is 6%?

Kate Bwalya wishes to retire in 30 years’ time and has estimated that she will require a monthly pension income of K24,000 per month for 20 years subsequent to retirement. Kate will contribute to a retirement fund which will enable her to take out a monthly pension of K24,000 after retirement. The retirement fund is currently earning a return of 9% per annum, interest compounded monthly, and this level is expected to remain unchanged and to be sustainable over the next 50 years. Determine the monthly contribution that Kate is required to make to the retirement fund over the next 30 years.

Suppose ABC Corporation has an obligation to pay $10,000 and $40,000 at the end of 5 years and 7 years respectively. In order to meet this obligation, it plans to invest money by selecting from the following three bonds:

All bonds have the same face value $1000. Assume that the annual rate of interest to be used in all calculations is 6%. Consider semi-annual compounding.

(Keep your answers to 2 decimal places, e.g. xxx.12.)

(a) Find the present value and duration of the obligation.

     Obligation price:            Obligation duration:

(b) Find the price for each of these bonds.

     Bond 1:           Bond 2:           Bond 3:

(c) Determine Macaulay durations D1, D2, and D3 of these three bonds, respectively. (Keep 2 decimal places.)

     D1:                 D2:                  D3:

(d) Can the Corporation choose bonds 1 and?2 to construct its portfolio? Justify your answer. (No need to key in answer.)

(e) Suppose the Corporation decides to use bonds 2 and 3. Denote by V2 and V3 to be the amounts of money to be invested in the two bonds, respectively. To get an immunized portfolio, write down appropriate equations in V2 and V3 first, and solve for V2 and V3.

      V2:              V3:

I have no idea how to do (e).
My answers:
a) 33885.65, 6.56
b) 945.83, 950.23, 1074.39

c) 1.71, 3.07, 4.76

Please help! Thanks!

Millennials Are More Narcissistic

Read the Point and Counterpoint arguments and answer the question listed below:

Which argument do you agree with (point or counterpoint)? Explain your reasoning. (one page)

Point

Those in college today have many good qualities: they are more technologically savvy, more socially tolerant, and more balanced in their work and family priorities than previous generations. Thus, those poised to enter the workforce today do so with some important virtues. Humility, however, is not one of them.

Several large-scale, longitudinal studies found that those graduating from college today are more likely than those from previous generations to have seemingly inflated views of themselves. Compared to previous generations, more U.S. college students now rate themselves as above average on attributes such as academic ability, leadership, public speaking ability, and writing ability. College graduates today are more likely to agree they would be “very good” spouses (56 percent, compared to 37 percent among 1980 graduates), parents (54 percent, compared to 36 percent among 1980 graduates), and workers (65 percent, compared to 49 percent among 1980 graduates).

Studies measuring narcissism suggest that scores are rising, especially among younger generations. For example, by presenting a choice between two statements—“I try not to be a show-off” versus “I will usually show off if I get the chance”—psychologists have found that narcissism has been growing since the early 1980s.

Another recent study found that, compared to Baby Boomers and Generation Xers, students entering college today are more likely to emphasize extrinsic values (e.g., money, image, fame) and less likely to value intrinsic ones (e.g., concern for others, charity, jobs that contribute to society).

It doesn’t paint a pretty picture, but data do not lie: the sooner we admit it, the sooner we can begin to address the problem in families, in education, and at work.

Counterpoint

“THE YOUTH OF TODAY ARE LOST!” This argument is like a broken record that seems to play over and over: every generation tends to think the new generation is without values, and the new generation thinks the older one is hopelessly judgmental and out of touch. Didn’t the supposed “Me generation” occur a generation ago? Let’s send the broken record to the recycling bin and review the evidence.

Another study offered an interesting explanation for why people think Millennials are more narcissistic. Specifically, young people in general are more self-focused, but as people age, they become more “other” focused. So we think young people are different when in fact they’re just the way older folks were when they were younger. As these authors conclude, “Every generation is Generation Me.” Our level of narcissism appears to be one of the many things that changes as we get older.

In fact, this raises an important point: values change over time as we age, but we should not confuse that change with generational effects. One large-scale review of the literature revealed that during college years, we place more weight on intrinsic values, and as we progress in our careers and start families, extrinsic values increase in importance.

Other research has found that people think the generations differ in their values much more than they in fact do. One study found that of 15 work values, in every case, the perceived differences between among Baby Boomers, Generation Xers, and Millennials were greater than the actual ones.

More broadly, narcissistic folks exist in every generation. We need to be careful when generalizing about entire groups (whether one sex, one race, one culture, or one generation). While generalizations have caused no small amount of trouble, we still like to simplify the world, sometimes for good reason. In this case, however, the good reason isn’t there, especially considering the latest evidence.

Sources: J. M. Twenge, W. K. Campbell, and E. C. Freeman, “Generational Differences in Young Adults’ Life Goals, Concern for Others, and Civic Orientation, 1966–2009,” Journal of Personality and Social Psychology102 (2012), pp. 1045–-1062; J. Jin and J. Rounds, “Stability and Change in Work Values: A Meta-Analysis of Longitudinal Studies,” Journal of Vocational Behavior 80 (2012), pp. 326–-339; and S. W. Lester, R. L. Standifer, N. J. Schultz, and J. M. Windsor, “"Actual Versus Perceived Generational Differences at Work: An Empirical Examination,”" Journal of Leadership & Organizational Studies 19 (2012), pp. 341–-354.

Considering the following financial information for Atlas Awesome Manufacturing, Inc. and Delilah Superior Manufacturing Inc. Both companies are in the same industry and have identical operating income of $8.4 million. Atlas finances its $15 million in assets with $2 million debt ( on which it pays 9 percent interest) and 13 million in equity. Delilah finances its $15 million in assets with $12 million in debt ( on which it pays 8 percent interest). Both companies pay 32 percent tax on their taxable income.

Calculate the following:

A. Each firms net income

B. The income each firm has available to pay its debt holders and stock holders (the firms asset funders)

C. The returns available to the asset funders on their investment in each company (the return on asset-funders investment)

D. Which company offers a higher return on investment to its asset funders? Explain why this company is able to offer a higher rate of return on investment to its asset funders.

Please show all calculations in digital typed format. Please don't use hand writing.

Also please answer all A,B,C,D. Thank you so much.

Research publicly traded companies and select two companies in different sectors. Provide a written comparison of the capital structure for each. Explain your conclusions on the similarities and differences. What factors can you suggest for why each company adheres to their chosen structuring mechanism?

24*. County Bank has the following market value balance sheet (in millions, all interest at annual rates). All securities are selling at par equal to book value.
Assets Liabilities and equity
$ $
Cash 20 Demand deposits 100
15-year commercial loan at 10% interest, balloon payment 160 5-year CDs at 6% interest, balloon payment 210
30-year mortgages at 8% interest, balloon payment 300 20-year debentures at 7% interest, balloon payment 120
Equity 50
Total assets 480 Total liabilities and equity 480
(a) What is the maturity gap for County Bank?
(b) What will be the maturity gap if the interest rates on all assets and liabilities increase by 1 per cent?
(c) What will happen to the market value of the equity?
25*. If a bank manager is certain that interest rates were going to increase within the next six months, how should the bank manager adjust the bank's maturity gap to take advantage of this anticipated increase? What if the manager believes rates will fall? Would your suggested adjustments be difficult or easy to achieve?

Q1. What’s the risk premium? What’s the risk-free rate typically considered to be?

Q2. What duties does a company treasurer typically perform?

Q3. Identify and discuss the causes of the financial crisis that peaked in autumn of 2008. Why did it get worse?

Introduction

Three Structural engineers, Huey, Luey, and Stan created HLS. The firm has been involved with industrial and commercial work related to the construction facilities. They have designed heating and ventilation systems for factories and shopping malls, piping for refineries and chemical plants, and even a treatment facility for oil tanker ballast water.

When HLS first started, most of the work was subcontracts for heating and ventilation systems for individual buildings. The scope of work has increased over the years as well as the staff. The firm now employs 30 engineers including the original 3 founders. HLS still generally works as a subcontractor to other design firms. Presently, the three owners are content and do not want to diversify into the other branches of engineering or become more generalized.

Almost all of the analysis and technical drawings are done with an ever-increasing array of software packages. This presents an issue for HLS moving forward. The current system seems to be have issues keeping pace with the demands of work. As a result, HLS has lost $90,000 worth in jobs because of not working with updated software.

The specific package that is being sought is offered by Scrooge industries. The initial cost would be $50,000 and would have an annual fee of 15%. This fee covers service, answering questions, and periodic updates. Another $60,000 would be needed for a software integration. The training for the program is estimated to be $24,000, and one sixth of that would be an annual upkeep cost. This program is expected to have a life expectancy of 10 years.

If the software does prove practical, the next step would be to find out how to finance it. HSL have come up with 2 main sources to draw income. The first is to offer stock to employees. The second would to take out a loan from the bank.

Option A would be to offer stock options to the employees. Since HSL cannot set up the plan as a profit share (there is no money to share) employees would take part of their pay as stock. Then HSL would match on a one-for-four basis. Example: someone who set aside $2000 would be credited with $2500 in stock at the end of the year. It can be assumed that half of the employees (15) would participate with an average of $100 per month per employee.

Option B would be getting a loan from the bank. The maximum amount the bank would loan HSL would be $140,000 at 15% over three years or less. If more is needed, it will cost HSL $9,000 in fees for securing the loan and an additional 1% interest on top of it.

Recommendations

The recommendation is to get the software.

Analysis:

1. Determine which method would be best to pay for the software