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Question 111  portfolio risk, correlation

All things remaining equal, the variance of a portfolio of two positively-weighted stocks rises as:



Question 209  CFFA

Find Piano Bar's Cash Flow From Assets (CFFA), also known as Free Cash Flow to the Firm (FCFF), over the year ending 30th June 2013.

Piano Bar
Income Statement for
year ending 30th June 2013
  $m
Sales 310
COGS 185
Operating expense 20
Depreciation 15
Interest expense 10
Income before tax 80
Tax at 30% 24
Net income 56
 
Piano Bar
Balance Sheet
as at 30th June 2013 2012
  $m $m
Assets
Current assets 240 230
PPE    
    Cost 420 400
    Accumul. depr. 50 35
    Carrying amount 370 365
Total assets 610 595
 
Liabilities
Current liabilities 180 190
Non-current liabilities 290 265
Owners' equity
Retained earnings 90 90
Contributed equity 50 50
Total L and OE 610 595
 

 

Note: all figures are given in millions of dollars ($m).



Question 256  APR, effective rate

A 2 year corporate bond yields 3% pa with a coupon rate of 5% pa, paid semi-annually.

Find the effective monthly rate, effective six month rate, and effective annual rate.

##r_\text{eff monthly}##, ##r_\text{eff 6 month}##, ##r_\text{eff annual}##.



Question 498  NPV, Annuity, perpetuity with growth, multi stage growth model

A business project is expected to cost $100 now (t=0), then pay $10 at the end of the third (t=3), fourth, fifth and sixth years, and then grow by 5% pa every year forever. So the cash flow will be $10.5 at the end of the seventh year (t=7), then $11.025 at the end of the eighth year (t=8) and so on perpetually. The total required return is 10℅ pa.

Which of the following formulas will NOT give the correct net present value of the project?



Question 658  CFFA, income statement, balance sheet, no explanation

To value a business's assets, the free cash flow of the firm (FCFF, also called CFFA) needs to be calculated. This requires figures from the firm's income statement and balance sheet. For what figures is the income statement needed? Note that the income statement is sometimes also called the profit and loss, P&L, or statement of financial performance.



Question 752  IRR, NPV

All other things remaining equal, a project is worse if its:



Question 815  expected and historical returns

If future required returns fall, and future expected cash flows remain the same, then prices will , or remain the ?


Question 843  monetary policy, institution, no explanation

The Australian central bank implements monetary policy by directly controlling which interest rate?



Question 878  foreign exchange rate, American and European terms

If the Australian dollar quote of 0.8 USD per AUD suddenly falls to 0.7 USD per AUD, has the Australian dollar or against the US dollar?



Question 968  foreign exchange rate, forward foreign exchange rate, cross currency interest rate parity, no explanation

Below is a graph showing the spread or difference between government bond yields in different countries compared to the US. Assume that all governments have zero credit risk.

According to the principle of cross-currency interest rate parity, which country is likely to have the greatest expected currency appreciation against the USD over the next 2 years?