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建立人际资源圈Fin_Gm_571_Week_2_Problem_Set
2013-11-13 来源: 类别: 更多范文
Text Problems
Abraham Kamara
FIN/GM 571
November 2010
Dr. Furman
Text Problems
Chapter 4
(A9) Rate of Return
a) Adrian’s Rate of Return
PV= C×1/ (1+r) 4
$208,000 = $256,000×1/ (1+r)
0.8125= 1/ (1+r) 4
(1+r) 4 = 1/0.8125
r = 1.05328 -1
r = 0.532
r = 5.32% (Rate of Return)
b) Bill’s Rate of Return
PV = C×1/ (1+r) 4
$195,000 = $168,000× 1/ (1+r)
$195,000/$168,000 = 1/ (1+r) 4
1.6071 = 1/ (1+r) 4
(1+r) 4 = 1/1.16071
(1+r) 4 = 0.861538
Find the roots of both sides
r = -0.963427-1
r = -0.36573
r = -3.66% (Rate of Return)
(A11) Present and Future Value
a) Present Value
PV = 500×1/ (1.10) 3/0.10
PV = $1,243.43
b) Future Value
FV =500× [(1.1) 3-1]/0.1
FV = $1,655
Chapter 5
(B20) Constant Growth
a) P1 = D2/r-g
P1 = 1/ (0.13-0.06) = $14.29
P0 = $14.29/ (1+0.13) 1 = $12.64
b) P3 = Dy/r-g = 1/0.13-0.04 = $11.11
P0 = $11.11/ (1+0.13) 3 = $7.70
Chapter 5
(A1) Bond Valuation
FV = - $895.94
(A10) Dividend discount Model
P0 = D1/ r-g
5.6/0.10-0.06 = $140.00
(A12) Required return for a Preferred stock
PV = D/r = D/ PV
PV = 3.38/45.27 = 0.746
PV = 7.6%
(A14) Stock Valuation
PV = D/r = $1.00/0.03
PV = $33.33
(B16) Interest Rate Risk
a) N = 1×2 = 2
r = .08/2 = 4%
PMT = 45,625 FV = $1,000
(16)
A1. PV = -$1,010.61
A2. FV = $1,000
A3. FV = $1,000
PV = -$1,097.27
B1.FV = $1,000
PV = -$1,020.18
B2.FV = $1,000
PV = -$1,116.03
B3. FV = $1,000
PV = -195.42
C1. FV = $1,000
PV = -$1,001.17
C2. FV = $1,000
PV = -$1,006.39
C3. FV = $1,000
PV = -$1,010.18
D. The risk of interest rate varies directly with maturity of the bonds. The longer it takes for bonds to mature, the more the price changes when the interest rates change.
(B18) Default risk
a) N = 3.5×2 = 7
R ='
PV = -$500
PMT = 9.5%×1,000/2 = $47.50
FV = $150-$47.50 = $102.50
R = -2.8746%
APY = (1+r) m -1 = (1-0.0278) 2 -1
APY = -5.666
YTM = 2× (-2.8746)
= -5.74792% APR
(b)
a) N = 10×2 = 20yrs.
r ='
PV = $500
PMT = 9.5×1,000/2 = $47.50
FV = $1,000.00 r = 11%
APY = (1+r) n -1
APY = (1+0.110489) 2 -1 = 23.3185%
YTM = 2×11.0489 = 22.1 APR
Chapter 7
C1 Beta and Required Return
a) Expected return on the stock market
0.2×(-.010)+0.35×.010×0.3×.015+0.15×.025 = 9.75%
Expected return on Chicago Gear
0.20×-.015+0.35×.015+0.30×.025+0.15×0.035 = 15%
(b) Chicago beta
β= 0.018/0.0121 = 1.49
(c)
Chicago required return
c.r = rr+ B (rm-rr)
r= 0.06+1.49(0.975-0.06 = 0.1159
r = 11.59%
