# Fight Finance

#### CoursesTagsRandomAllRecentScores

Question 109  credit rating, credit risk

Bonds with lower (worse) credit ratings tend to have:

A share pays annual dividends. It just paid a dividend of $2. The growth rate in the dividend is 3% pa. You estimate that the stock's required return is 8% pa. Both the discount rate and growth rate are given as effective annual rates. Using the dividend discount model, what is the share price? The 'option strike price' in an option contract, also known as the exercise price, is paid at the start when the option contract is agreed to. or ? The CAPM can be used to find a business's expected opportunity cost of capital: $$r_i=r_f+β_i (r_m-r_f)$$ What should be used as the risk free rate $r_f$? Payout policy is most closely related to which part of a business? An Indonesian lady wishes to convert 1 million Indonesian rupiah (IDR) to Australian dollars (AUD). Exchange rates are 13,125 IDR per USD and 0.79 USD per AUD. How many AUD is the IDR 1 million worth? A trader sells a one year futures contract on crude oil. The contract is for the delivery of 1,000 barrels. The current futures price is$38.94 per barrel. The initial margin is $3,410 per contract, and the maintenance margin is$3,100 per contract.

What is the smallest price change that would lead to a margin call for the seller?

Which of the following is NOT a valid method for estimating the beta of a company's stock? Assume that markets are efficient, a long history of past data is available, the stock possesses idiosyncratic and market risk. The variances and standard deviations below denote total risks.

A trader sells one crude oil European style call option contract on the CME expiring in one year with an exercise price of $44 per barrel for a price of$6.64. The crude oil spot price is \$40.33. If the trader doesn’t close out her contract before maturity, then at maturity she will have the:

Over-priced assets should NOT: