Question

In: Finance

You are considering taking a 1-year certificate in stock trading or a 1-year certificate in financial...

  1. You are considering taking a 1-year certificate in stock trading or a 1-year certificate in financial analytics. The certificate in trading will cost you $25,000 and will increase your salary by $8,000 a year for the next 5 years. The certificate in analytics will cost $40,000, and will increase your salary by $12,000 a year for the next 5 years. Based on your calculation of NPV and IRR and MIRR, which certificate will you choose? Use 10% as your discount rate.

Solutions

Expert Solution


Related Solutions

You are considering taking a 1-year certificate in stock trading or a 1-year certificate in financial...
You are considering taking a 1-year certificate in stock trading or a 1-year certificate in financial analytics. The certificate in trading will cost you $25,000 and will increase your salary by $8,000 a year for the next 5 years. The certificate in analytics will cost $40,000, and will increase your salary by $12,000 a year for the next 5 years. Based on your calculation of NPV and IRR and MIRR, which certificate will you choose? Use 10% as your discount...
A stock was trading at $125.10 at the end of year 1. It was trading at...
A stock was trading at $125.10 at the end of year 1. It was trading at the end of year 2 at $118.40 immediately after giving a dividend of $5.00. At the end of year 3. it was trading at $128.60 immediately after giving a dividend of $5.20. Finally, it was trading at $138.70 at the end of year 4 without giving out any dividend. What was the arithmetic average annual return of this stock for the three years between...
A stock was trading at $21.85 at the end of year 1. It was trading at...
A stock was trading at $21.85 at the end of year 1. It was trading at the end of year 2 at $22.18 immediately after giving a dividend of $0.30. At the end of year 3. it was trading at $21.54 immediately after giving a dividend of $0.32. Finally, it was trading at $23.36 at the end of year 4 without giving out any dividend. What was the geometric average annual return of this stock for the three years between...
Gold is currently trading for about 1,650 per ounce. You are considering 3 ways of taking...
Gold is currently trading for about 1,650 per ounce. You are considering 3 ways of taking a short position on gold: (i) sell 100 ounces of gold short, (ii) take a short position in 1000 gold futures (October 2020), (iii) buy a futures put options on 1000 gold futures at K=1650 (October 2020). (a) If you enter the above positions when gold equals 1,650, compare the dollars in profit from the three ways of betting against the price of gold...
Currently Zebe Corporation stock is trading at a price of $50. You are considering two options...
Currently Zebe Corporation stock is trading at a price of $50. You are considering two options that expire in January 2019. a. As a function of Zebe Corp’s stock price at expiration, draw a payoff diagram for a call option with a strike price of $60. b. As a function of Zebe Corp’s stock price at expiration, draw a payoff diagram for a put option with a strike price of $60.   c. Suppose the call option in (a) trades at...
QUESTION 1 Suppose you manage an algorithmic trading operation where computers are trading in the stock...
QUESTION 1 Suppose you manage an algorithmic trading operation where computers are trading in the stock market automatically without human intervention using algorithms. Suppose that your algorithm called “Shining Star” (SS) makes an average profit of $6000 each trading hour in the stock market. However, your gut instinct is that the algorithm’s performance has decreased recently. We have provided a random sample of 75 of the more recent hours of trading performance. PARTS Write down a hypothesis test for checking...
A stock is currently trading at $100. Consider a European call option with 1 year to...
A stock is currently trading at $100. Consider a European call option with 1 year to maturity and strike price $105. The continuously compounded risk-free interest rate is 10% per annum. The option currently trade at $7.5 Calculate the implied volatility.
You are considering investing your money in a bank certificate of deposit (that is, lending money...
You are considering investing your money in a bank certificate of deposit (that is, lending money to a bank). You have received the following quotations from four banks. Which bank should you select? Bank A: APR of 3.48 percent compounded annually Bank B: APR of 3.44 compounded semi-annually Bank C: APR of 3.36 compounded monthly Bank D: APR of 3.38 percent compounded daily Bank E: APR of 3.41 compounded continuously Group of answer choices Bank C Bank E Bank D...
You are considering taking a 3-year hiatus from school to open a cupcake business. You estimate...
You are considering taking a 3-year hiatus from school to open a cupcake business. You estimate the upfront capital expenditure will be $40,000 for equipment, which at the end of the 3-year project life will have a salvage value of $16,000. (Ignore terminal tax effects.) The CCA rate is 20%. You also estimate that you will need upfront Net Working Capital of $6,000 and that Net Working Capital needs thereafter will be 20% of Sales. (Assume recovery of NWC at...
Financial Planning Cases The Johnsons' Credit Questions They are considering trading their car in for a...
Financial Planning Cases The Johnsons' Credit Questions They are considering trading their car in for a newer used vehicle so that Harry can have dependable transportation for commuting to work. The couple still owes $5,130 to the credit union for their current car, or $285 per month for the remaining 18 months of the 48-month loan. The trade-in value of this car plus $1,000 that Harry earned from a freelance interior design job should allow the couple to pay off...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT