A fund will need to pay out $2 million next year, $3 million the following year, and then $5 million in the fifth year . If the discount rate is 7%, what is the Macaulay duration of this set of payments?

A. 2.98

B. 3.10

C. 3.20

D. 3.15

5. The mean room and board expense per year at four-year colleges is $10,453 and standard deviation $1650. You randomly select 64 four-year colleges.

a. What is the probability that the mean room and board is less than $10,750?

b. What is the probability that the mean room and board is between $9,700 and 10,300?

Predict what has happened to the yoga pants market this year relative to last year. Make sure to explain whether there is a movement along either the demand curve or supply curve or a shift of the demand curve, the supply curve, or both, and what your prediction is for how equilibrium quantity and price have changed relative to last year. Limit your answer to 3-4 sentences

Last year a company had sales of $800,000, operating costs of 70%, and year-end assets of $1,500,000. The debt-to-total-assets ratio was 20%, the interest rate on the debt was 10.00%, and the tax rate was 21%. The new CFO wants to see how the ROE would have been affected if the firm had used a 30% debt ratio. Assume that sales and total assets would not be affected, and that the interest rate and tax rate would both remain constant. How much would the ROE change in terms of percentage points in response to the change in the capital structure?

The current 1-year spot rate on a treasury bill is 4.25% and the current 1-year spot rate on a BB-rated bond of equivalent risk to a prospective loan is 11.55%. The bond has a marginal probability of default in year 2 of 8.5% 11. What is the marginal probability of default in year 1? (3 points) 12. What is the cumulative probability of default over the 2 years? (4 points)

The following transactions apply to Hooper Co. for Year 1, its first year of operations: Issued $170,000 of common stock for cash. Provided $96,000 of services on account. Collected $84,000 cash from accounts receivable. Loaned $11,000 to Mosby Co. on November 30, Year 1. The note had a one-year term to maturity and a 6 percent interest rate. Paid $44,000 of salaries expense for the year. Paid a $3,000 dividend to the stockholders. Recorded the accrued interest on December 31, Year 1 (see item 4). Estimated that 1 percent of service revenue will be uncollectible. b. Prepare the income statement, balance sheet, and statement of cash flows for Year 1

A machine costs $900,000 and requires $50,000 maintenance for each year of its three-year life. the maintenance costs are paid at the end of each year. after 3 years, the machine will be replaced. assume a tax rate of 34% and a discount rate of 14%. if the machine is depreciated over three years using the straight-line method, with no salvage value, what is the equivalent annual annuity?

If a half-year C1 percent coupon bond (paying twice per year) is trading at C2 and a one-year C3 percent coupon bond (paying twice per year) is trading at C4, find half-year and one-year discount factors. The face value of either bond is $100. Assume semi-annual compounding. Write your answers for the following:

18. Half-year discount factor.

19. One-year discount factor.

20. Half-year spot interest rate.

21. One-year spot interest rate.

22. Forward rate for 6 to 12 months.

C1=2.25

C2=100.35

C3=8.25

C4=106.2

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