the difference between the 30 year mortgage rate and the 30-year treasury bond rate is primary attribute to
a. interest rate risk
b. reinvestment rate risk
c. credit risk
d. insurance risk
In: Finance
BeBe had a tough year! She had two different unfortunate casualties during the year. First, her car was in an accident. Her car had a value of $20,000. Her basis (her cost) had been $30,000. After the accident, the value was reduced to only $10,000. Her insurance company reimbursed her for $3,000 only. Second, she had a separate free-standing storage she on her property, which burned down. The shed had a fair market value of $4,000, and a cost adjusted basis to BeBe of $3,500. Her insurance company reimbursed her $3,000 for her loss. If BeBe's adjusted gross income is $60,000, what is her deductible casualty loss, if any?
In: Accounting
BeBe had a tough year! She had two different unfortunate casualties during the year. First, her car was in an accident. Her car had a value of $20,000. Her basis (her cost) had been $30,000. After the accident, the value was reduced to only $10,000. Her insurance company reimbursed her for $3,000 only. Second, she had a separate free-standing storage she on her property, which burned down. The shed had a fair market value of $4,000, and a cost adjusted basis to BeBe of $3,500. Her insurance company reimbursed her $3,000 for her loss. If BeBe's adjusted gross income is $60,000, what is her deductible casualty loss, if any?
Show even very simple and obvious calculations.
In: Accounting
"SunlandCompany leased equipment to the Polan Company on July 1, Year 18, for a 10-year period expiring June 30, Year 28. Equal annual payments under the lease are $246000 and are due on July 1 of each year. The first payment was made on July 1, Year 18. The rate of interest contemplated by Sunland and Polan is 8%. The lease receivable before the first payment is$1740000 and the cost of the equipment on Sunland s accounting records was $1548000. Assuming that the lease is appropriately recorded as a sale for accounting purposes by Sunland, what is the amount of profit on the sale and the interest revenue that Sunland would record for the year ended December 31, Year 18?"
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$0 and $0 |
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$192000 and $139200 |
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$192000 and $119520 |
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$192000 and $59760 |
Which of the following is an advantage of leasing?
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Protection against obsolescence. |
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Leases often do not require any down payment. |
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Lease agreements may contain less restrictive provisions than other debt agreements. |
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All of these answer choices are correct. |
A lessee with a finance lease containing a bargain purchase option should depreciate the leased asset over the
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"life of the asset or the term of the lease, whichever is longer." |
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term of the lease. |
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period ending with the bargain purchase option date. |
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asset's remaining economic life. |
In: Accounting
Suppose that an investor with a five-year investment horizon is considering purchasing a seven-year 9% coupon bond selling at par (semi-annual coupon payments). The investor expects that he can reinvest the coupon payments at an annual interest rate of 9.4% and that at the end of the investment horizon two-year bonds will be selling to offer a yield to maturity of 11.2%.
What is the total of coupon and coupon reinvestment? (Round your answer to 2 decimal points)
What is the sale price of the bond at the end of the holding period? (Round your answer to 2 decimal points)
What is the expected (holding period) return for this bond? (Enter the result in percentage points (10 if you find 10%), round your answer to 2 decimal points)
In: Finance
A baseball player is offered a 5-year contract that pays him the following amounts:
Year 1: $1.05 million
Year 2: $1.81 million
Year 3: $2.07 million
Year 4: $2.58 million
Year 5: $3.35 million
Under the terms of the agreement all payments are made at the end of each year. Instead of accepting the contract, the baseball player asks his agent to negotiate a contract that has a present value of $1.92 million more than that which has been offered. Moreover, the player wants to receive his payments in the form of a 5-year ANNUITY DUE. All cash flows are discounted at 11.00 percent. If the team were to agree to the player's terms, what would be the player's annual salary (in millions of dollars)? (Express answer in millions. $1,000,000 would be 1.00)
In: Finance
The yield to maturity (YTM) on 1-year zero-coupon bonds is 5% and the YTM on 2-year zeros is 6%. The yield to maturity on 2-year-maturity coupon bonds with coupon rates of 15% (paid annually) is 5.2%.
a. What arbitrage opportunity is available for an investment banking firm?
b. What is the profit on the activity? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
In: Finance
Graph the year-over-year percentage growth of home prices in XX and explain the economic impact.
In: Economics
Suppose that an investor with a 3-year investment horizon is considering buying an 8-year 6% coupon bond selling at par (semi-annual coupon payments). The investor expects that she can reinvest the coupon payments at an annual interest rate of 7% and that at the end of the investment horizon all bonds will be selling to offer a YTM of 9%.
How much is the coupons & interest earned on reinvesting these coupon by the end of 3-yr?
What is the sale price of the bond by the end of 3 year?
What is the (annualized) expected holding period return for this bond?
Round your answer to 2 decimal places.
In: Finance
A 35-year-old man presented with a 6-year history of abdominal pain that he was convinced was cancer. For most of his life, the patient evidently had been dominated by a tyrannical father who never gave him the love he craved. When the patient was 29, his father died of carcinoma of the colon, and soon afterward, the patient developed abdominal pain. His complaints had gradually increased as his identification with his father, as well as his unconscious hostility towards him, increased. The patient came to the clinic almost daily with complaints of bloody stools (the feces were found to be free of blood) and the belief that he had cancer. He felt that none of the clinic doctors listened to him, just as his father had not
Treatment included development of longstanding, trusting, positive relationship with one of the clinic physicians, who allowed the patient time to talk about the illness. His symptoms gradually subsided during a 12-month period of supportive physician-patient relationship
1. An example of a symptom of a somatoform disorder is: _______
A. Obsession
B. Delusions of persecution
C. False sensory perception
D. Conversion
2. The patient’s hypochondriasis was treated successfully with: _______
A. Hypnosis
B. Neuroleptic therapy
C. Psychotherapy
D. ECT
In: Biology