For a price of $95, Nicole will sell you a 10 year bond paying semi-annual coupons of 8% pa. The face value of the bond is $100. Other bonds with the same risk, maturity and coupon characteristics trade at a yield of 8% pa.
A 180-day Bank Accepted Bill has a face value of $1,000,000. The interest rate is 8% pa and there are 365 days in the year. What is its price now?
A project's Profitability Index (PI) is less than 1. Select the most correct statement:
Which of the following statements about effective rates and annualised percentage rates (APR's) is NOT correct?
A mature firm has constant expected future earnings and dividends. Both amounts are equal. So earnings and dividends are expected to be equal and unchanging.
Which of the following statements is NOT correct?
Which of the following statements about futures contracts on shares is NOT correct, assuming that markets are efficient?
When an equity future is first negotiated (at t=0):
An effective monthly return of 1% ##(r_\text{eff monthly})## is equivalent to an effective annual return ##(r_\text{eff annual})## of:
Question 720 mean and median returns, return distribution, arithmetic and geometric averages, continuously compounding rate
A stock has an arithmetic average continuously compounded return (AALGDR) of 10% pa, a standard deviation of continuously compounded returns (SDLGDR) of 80% pa and current stock price of $1. Assume that stock prices are log-normally distributed.
In 5 years, what do you expect the median and mean prices to be? The answer options are given in the same order.
Question 743 price gains and returns over time, no explanation
How many years will it take for an asset's price to triple (increase from say $1 to $3) if it grows by 5% pa?