Looking for help with an assignment? Connect with an assignment Expert Now!

EXERCISES

EXERCISES.

EXERCISES

Question 1 (20 points)

Suppose there are two bonds you are considering:

Bond A

Bond B

Maturity (years)

15

25

Annual Coupon rate (%)

6

4

Par Value

1000

1000

a. If both bonds had a required rate of return of 5%, what would the bonds’ prices be?

b. Re-calculate the prices of the bonds if the required return falls to 7%.  Could you explain why the price increases or decreases given this change in required return?

Question 2 (20 points)

Calculate the NAV (Net asset value) of the following fund, assuming 500 shares are outstanding. Calculate the percentage change in the NAV of the fund if stock C climbs to $50.7.

Stock

Shares owned

price

A

1,500

$6.75

B

4,000

$45.30

C

2,000

$32.04

Cash

n.a.

$3,508

a) Will the NAV increase or decrease? Why?

b) Calculated your return on your investment given the change in NAV

Question 3 (20 points)

Suppose the Swiss Franc is currently traded at CHF 0.89/$. The British Pound is traded at GBP 0.79/$. Ignoring transaction costs:

a. Determine the CHF/GBP exchange rate consistent with these direct quotations.

b. Suppose the CHF/GBP cross rate in the market was at CHF 1.05/GBP. Is there any arbitrage opportunity?

Question 4 (30 points)

Consider the following three stocks:

• Stock A is expected to provide a dividend of $50 a share forever

• Stock B is expected to pay a dividend of $8 next year. Thereafter, dividend growth is expected to be 2% a year forever.

• Stock C is expected to pay a dividend of $15 next year. Thereafter, dividend growth is expected to be 12% a year for 4 years (until year 5) and zero thereafter.

a. If the market capitalization rate for each stock is 8%, which stock is the most valuable?

b. What happens if the capitalization rate drops to 6%? Explain

c. Assume EPS for stock A is 4, Stock B 9, and Stock C 15. Calculate the P/E ratio for each. Briefly explain what the different values mean to you.

Question 5 (10 points)

Word limit: 500 words.

Imagine that you have 100 000 EUR for medium-term investments. Which asset classes you would choose? (Specify share of each asset class).

How would you manage the risk of your investment protfolio? (Be concrete)

Would you pick some individual securities or would you invest in broad market portfolios? Why? If you decided to invest in some individual securities, explain how would you choose securities to your portfolio?

EXERCISES

Get a Quick Quote

Approximately 250 words
Total price (USD) $: 10.99

Spend Hours doing a Paper or spend Less for a 3 page essay?

Tired writing homework

Reviews from Clients who Ordered this Paper

Our Benefits

Get your essay writing needs completed by us and enjoy these and more benefits:

Fast

Whether you have a last minute discussion post due in a couple of hours or the last day in class and you totally forgot to work on that research paper, we always put everything aside to save your grade

Custom Essay

Our qualified team of experts have access to varied online library databases to help with recent and well researched tools that help in writing your paper to deliver a profound research that earns you a stellar grade

80+ Subjects

We do not turn down any type of work. We have qualified writers holding bachelors, graduate and Doctoral certificates matched with skill and expertise. Get help with homework acroos varied subject

Real Time Tracking

We have a user friendly interface to help you track the progress on your order from your client portal. Additionally, with each and every step, you will get notified on the status of your paper to give you an easy time to do other kinds of stuff

Order Our Custom Essay Writing Service

1. Making an Order Tip and Tricks

  • Choose the type of assignment, topic, subject, length, and deadline for your paper.
  • Indicate the following order parameters: service, chosen writer level, number of cited sources, and citation style.
  • Add your document or provide instructions for paper in a specific form.
Image showing step 1 of making an order
Image showing how to make payment for your order

2. Tips and Tricks for Choosing the Right Writer

  • Log in using your email address or your Facebook account.
  • A list of suitable writers will be offered to you. Before making a selection, you can read testimonials or engage in a Live Chat with authors.
  • Check your balance and, if necessary, add funds to your account. Here you will also find exclusive bargains.
  • Put money into the account of the chosen writer.

3. Tips and Tricks for Supervising the Writing Process

  • Get the chance to keep track of the process and connect with your writer.
  • If required, include updated instructions.
  • Have a conversation with your author.
Image showing how to supervise writing process
Image showing how to download your completed results

4. Tips and Tricks to Enjoy the Results

  • You will receive the paper. You have the option of requesting modifications if they are required. Before giving it back to the writer, make a list of the adjustments that need to be made.
  • Accept the paper and send the money to the author.
  • Rate your writer, submit your request, then sit back and enjoy the results.

How can we even make your school life easier with our services?

We always strive to provide the best techniques and skills that help your essay a stellar paper. We have achieved this through the years by offering features such as:

Progressive Delivery

Your order is assigned to a writer who delivere’s your bulk research projects in small chunks and making edits upon feedback from the professor

Native Writers

Our writers are varied across different coutnries such s Canada, Australia, U.K and the United States. Request a native speaker writer to help you ace that paper

Powerpoint slides & other visuals

Order a visual such as Powerpoint to better expound your research paper at $10 per slide including speaker notes

Top rated writers

Order from among the top 10 rated writers at no extra cost