Which of the following does the sensitivity of the bond price to the changes in interest rates depend on?
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Maturity of the bond |
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Coupon rate |
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Both maturity of the bond and the coupon rate |
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None |
Which of the following is correct when the Coupon Rate of a bond is equal to its Yield to Maturity?
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The price of this bond is equal to its face value. |
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The price of this bond is higher than its face value. |
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The price of this bond is lower than its face value. |
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None. |
Which of the following is correct for stocks?
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Cash flows from stocks are known and guarranteed. |
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Maturity of stocks is a specific known date. |
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The quantity of cash flows (the number of payments) from stocks are unknown. |
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End value of stocks are known. |
Debtholders have a "residual claim" on assets. In other words, out of the company's assets, first the common stockholders are paid and the residual is paid to the debtholders.
True
False
In: Finance
Consider a monopolist that operates on two. The total demand on the first market is D1(p1) = 80 − p1. The total demand on the second market is D2(p2) = 40 − p2. Let the cost function be C(q) = 20q.
(a) Suppose the monopolist cannot price discriminate , i.e., it faces a single demand D(p) = D1(p) + D2(p). Find the optimal price and quantity on each market, total monopoly profit, consumer surplus, and total surplus.
(b) Suppose the monopolist can charge a different price on each of the two mar- kets. Find the optimal price and quantity on each market, total monopoly profit, consumer surplus, and total surplus.
(c) Suppose that the monopolist can separate the markets and practice perfectprice discrimination within each market. Find the quantity traded on each market, total monopoly profit, consumer surplus, and total surplus.
In: Economics
1. If the multiplier is 5 and a change in fiscal policy leads to a $500 million decrease in total spending, we can conclude that:
A) Government spending decreased by $500 million.
B) Taxes increased by $500 million.
C) Taxes decreased by $100 million.
D) Government spending decreased by $100 million.
2. Which of the following shifts, ceteris paribus, will cause an increase in both unemployment and inflation?
A) An increase in aggregate demand. C) An increase in aggregate supply.
B) A decrease in aggregate demand. D) A decrease in aggregate supply.
3. Given that autonomous consumption equals $1000, income equals $20,000, and the MPC equals 0.90, the level of:
A) Saving equals $4,000. C) Consumption equals $17,000.
B) Consumption equals $19,000. D) Consumption equals $16,000.
4. Assume the MPC is 0.80. The change in GDP because of an increase in Government spending of $150 billion would be:
A) $75 billion. B) $150 billion. C) $600 billion. D) $750 billion.
5. How might macroeconomic equilibrium be affected by the following events. Describe in words or draw a well labeled diagram.
a) a stock market crash b) the election of a new president
c) severe food crop failures in Canada d) a spike in oil prices
Complete the following table:
|
Real Output Demanded (in $ billions) by: |
||||||
|
Price Level |
Consumption |
Investment |
Government |
Net Exports |
Agg’t Demand |
Agg’t Supply |
|
140 |
90 |
50 |
50 |
6 |
300 |
|
|
130 |
100 |
70 |
50 |
10 |
270 |
|
|
120 |
110 |
80 |
50 |
10 |
250 |
|
|
110 |
150 |
108 |
50 |
12 |
230 |
|
|
100 |
170 |
110 |
50 |
14 |
200 |
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a) What is the equilibrium level of GDP?
b) What is the equilibrium price level?
c) If full employment occurs at real GDP = $230 billion, what kind of GDP gap exists?
d) How large is that gap?
e) Which macro problem exists here?
In: Economics
Examine the financial statements below. Use this information to answer questions 1-7. Note: All figures are in millions of dollars.
The XXX Corporation: Balance Sheet, 2018
Cash & marketable securities $200 Accounts payable 100
Accounts receivable 150 Notes payable 100
Inventories 250 Total current liabilities $200
Total current assets $600 Long-term debt 400
Total liabilities $600
Fixed assets 900
Common stock 50
Retained earnings 850
Total equity $900
Total assets $1,500 Total liabilities and equity $1,500
The XXX Corporation: Income Statement, 2018
Sales revenue $1,200
Cost of goods sold 700
Selling expenses 200
Depreciation 150
Earnings before interest and taxes $150
Interest paid 50
Taxable income $100
Taxes (40%) 40
Net income $60
1. The quick ratio is:
0.57 B. 1.75 C. 3.0 D. 1.25 E. 0.80
2. The equity multiplier is:
1.67 B. 0.60 C. 0.40 D. 1.50 E. 0.67
3. The net profit margin is:
A. 0.05 B. 0.15 C. 0.60 D. 0.50 E. 0.12
4. The operating cash flow for 2018 was ____ million.
A. +$60 B. -$60 C. +$260 D. +$160 E. +$100
5. The current market price of XXX is $30 per share. The price earnings ratio is 25. The number of shares outstanding is _______ million.
6. The total asset turnover ratio is:
7. If XXX were to acquire $50 million in inventory with a $50 million increase in accounts payable (other things equal), the current ratio would _____, and the quick ratio would _____.
A. increase, increase
B. not change, decrease
C. not change, not change
D. decrease, increase
E. decrease, decrease
In: Finance
-Using MySQL Workbench Data Modeler, create three (3) models
from the tables below. Show Table 1 in 3rd Normal Form. Show Table
2 in 3rd Normal Form. Merge the 3rd Normal Forms of Table 1 and
Table 2 into a single 3rd Normal Form model. Note that you only can
model table and column names and data types. The data shown is for
your reference to determine functional, partial, and transitive
dependencies.
-Provide a summary of the steps you took to achieve 3rd Normal
form. Include your rationale for new table creation, key selection
and grouping of attributes.
| Table 1 | Table 2 | ||||||||||
| Department | ProductCode | AisleNumber | Price | UnitofMeasure | Supplier | Product | Cost | Markup | Price | DeptCode | |
| Produce | 4081 | 1 | $0.35 | lb | 21 – Very Veggie | 4108 – tomatoes, plum | $1.89 | 5% | $1.99 | PR | |
| Produce | 4027 | 1 | $0.90 | ea | 32 – Fab Fruits | 4081 – bananas | $0.20 | 75% | $0.35 | PR | |
| Produce | 4108 | 1 | $1.99 | lb | 32 – Fab Fruits | 4027 – grapefruit | $0.45 | 100% | $0.90 | PR | |
| Butcher | 331100 | 5 | $1.50 | lb | 32 – Fab Fruits | 4851 – celery | $1.00 | 100% | $2.00 | PR | |
| Butcher | 331105 | 5 | $2.40 | lb | 08 – Meats R Us | 331100 – chicken wings | $0.50 | 300% | $1.50 | BU | |
| Butcher | 332110 | 5 | $5.00 | lb | 08 – Meats R Us | 331105 – lean ground beef | $0.60 | 400% | $2.40 | BU | |
| Freezer | 411100 | 6 | $1.00 | ea | 08 – Meats R Us | 332110 – boneless chicken breasts | $2.50 | 100% | $5.00 | BU | |
| Freezer | 521101 | 6 | $1.00 | ea | 10 – Jerry’s Juice | 411100 – orange juice | $0.25 | 400% | $1.00 | FR | |
| Freezer | 866503 | 6 | $5.00 | ea | 10 – Jerry’s Juice | 521101 – apple juice | $0.25 | 400% | $1.00 | FR | |
| Freezer | 866504 | 6 | $5.00 | ea | 45 – Icey Creams | 866503 – vanilla ice cream | $2.50 | 100% | $5.00 | FR | |
| 45 – Icey Creams | 866504 – chocolate ice cream | $2.50 | 100% | $5.00 | FR |
In: Computer Science
10) If MUx/Px < MUy/Py, then
A) spending a dollar less on Y and a dollar more on X increases utility.
B) spending a dollar less on X and a dollar more on Y increases utility.
C) X is more expensive than Y.
D) Y is more expensive than X.
11) Ellie is spending her entire income on goods X and Y. Her marginal utility from the last unit of X is 100 and the marginal utility from the last unit of Y that she consumes is 50. Ellie's utility is only maximized if
A) the prices of X and Y are the same.
B) the price of good X is twice that of good Y.
C) the price of good Y is twice that of good X.
D) We cannot determine whether Ellie is maximizing her utility.
12) For normal goods
A) the substitution and income effects of a price decrease will both decrease the quantity of the good demanded.
B) the substitution and income effects of a price decrease will both increase the quantity of the good demanded.
C) the substitution effect of a price decrease will increase the quantity of the good demanded while the income effect of a price decrease will decrease the quantity of the good demanded.
D) the substitution effect of a price decrease will decrease the quantity of the good demanded while the income effect of a price decrease will increase the quantity of the good demanded.
13) For inferior goods
A) the substitution and income effects of a price increase will both decrease the quantity of the good demanded.
B) the substitution and income effects of a price increase will both increase the quantity of the good demanded.
C) the substitution effect of a price increase will increase the quantity of the good demanded while the income effect of a price increase will decrease the quantity of the good demanded.
D) the substitution effect of a price increase will decrease the quantity of the good demanded while the income effect of a price increase will increase the quantity of the good demanded.
In: Economics
I’m having a very hard time doing this practice problem. Can someone show me how it’s done in excel?
The president of your firm is interested in investing some of your corporation’s money in bonds. You went to the bond screener in Yahoo! Finance and narrowed the possibilities down to two bonds both maturing on August 15, 2030. You also determined the prevailing market rate on bonds similar to these two is 6%. The two bonds you selected were:
In order to compose a memo to the president, you first will calculate the price of each bond (use August 15, 2018
as your purchase or settlement date). In your memo, explain why these prices are so different and why you would ever pay more than face value for a bond.
Next calculate the price of each bond at the end of each year until the bonds have one year to maturity (e.g. 11 years, 10 years, 9 years, …, 1 year), assuming interest rates remain constant. Explain in your memo what happens to the price of each bond as they will near the maturity date of August 15, 2030,and why this happens.
You also need to address in your memo the difference between interest yield and capital gains yield. In order to do so, you need to calculate the expected interest yield for each bond for each year remaining until maturity (e.g. 11 years left to maturity down to 1 year to maturity). Recall from your notes that interest yield = this year’s coupon payment/last year’s price. For the interest yield during the first year of holding the bond, from August 15, 2018 to August 15, 2019, you would use coupon interest payment/bond dollar price for August 15, 2018. This represents the interest yielded during the first year you held the bond. Then continue on for the remainder of the years.
For the capital gains yield, you will follow a similar process working from the end of the first year down to the last year of holding the bonds. Again recall from notes, that your capital gains yield is = (this year’s price-last year’s price)/last year’s price.
In your memo by putting the interest yield and capital gains yield together, you will be able to discuss the total return (yield) for each bond. From notes, you know that the total return on a bond = interest yield + capital gains yield. Make
sure to address the difference in interest yield, capital gains yield, and total yield between the two bonds.
Your boss also asked you to determine the yield to maturity on two bonds she found that both mature on December 1, 2033. On August 15, 2018, you looked up the information for the two bonds of interest. The two bonds are:
In your memo, indicate what the yield to maturity for each bond is. Also address if the bonds were callable on December 1, 2025 at a call price of $1,070 for the Cincinnati Bell bond and $1,055 for the Merck bond, what would be their yields to call? Indicate for which bond would you need the yield to call rather than yield to maturity and why.
In: Finance
1) Would you characterize the relationship between a company’s shareholders and management as cooperative or combative? Why?
2) Your first assignment as a financial analyst is to value the stock of Tesla. Unfortunately, Tesla hasn’t paid any dividends yet so we can’t use the dividend discount model. But you do know that the average price-earnings (PE) ratio for the car manufacturing industry is 30 and you also know Tesla’s earnings-per-share (EPS) is $1. Using the PE valuation method, what is the present value (fair price) of Tesla’s stock?
In: Finance
Use the budget constraint PxX+PYY=M, thinking of good X as a food item and good Y as other goods. Present an analysis where an increase in price of the food item causes the consumer to by less food, demonstrating the “law of demand.” Then, present a second analysis where an increase in the price of the food item causes the consumer to buy more of the food item, which is the Giffen Good case. Finally, identify two food items, one which you think fits the first case and one which you think fits the second case.
In: Economics
Scenario 2 The industry demand curve for a particular market is: Q = 1800 - 200P. The industry exhibits constant long-run average cost at all levels of output, regardless of the market structure. Long-run average cost is a constant $1.50 per unit of output. Calculate market output, price (if applicable), consumer surplus, and producer surplus (profit) for each of the scenarios below. Compare the economic efficiency of each possibility.
a. Perfect Competition
b. Pure Monopoly (Hint: MR = 9 - 0.01Q)
c. First Degree Price Discrimination
In: Economics