A credit card offers an interest rate of 18% pa, compounding monthly.
Find the effective monthly rate, effective annual rate and the effective daily rate. Assume that there are 365 days in a year.
All answers are given in the same order:
### r_\text{eff monthly} , r_\text{eff yearly} , r_\text{eff daily} ###
A company issues a large amount of bonds to raise money for new projects of similar risk to the company's existing projects. The net present value (NPV) of the new projects is positive but small. Assume a classical tax system. Which statement is NOT correct?
Diversification is achieved by investing in a large amount of stocks. What type of risk is reduced by diversification?
Portfolio Details | ||||||
Stock | Expected return |
Standard deviation |
Correlation ##(\rho_{A,B})## | Dollars invested |
||
A | 0.1 | 0.4 | 0.5 | 60 | ||
B | 0.2 | 0.6 | 140 | |||
What is the standard deviation (not variance) of returns of the above portfolio?
There are a number of ways that assets can be depreciated. Generally the government's tax office stipulates a certain method.
But if it didn't, what would be the ideal way to depreciate an asset from the perspective of a businesses owner?
Which one of the below statements about effective rates and annualised percentage rates (APR's) is NOT correct?
Question 580 price gains and returns over time, time calculation, effective rate
How many years will it take for an asset's price to quadruple (be four times as big, say from $1 to $4) if the price grows by 15% pa?
Which of the below formulas gives the profit ##(\pi)## from being long a call option? Let the underlying asset price at maturity be ##S_T##, the exercise price be ##X_T## and the option price be ##f_{LC,0}##. Note that ##S_T##, ##X_T## and ##f_{LC,0}## are all positive numbers.
A firm wishes to raise $50 million now. They will issue 7% pa semi-annual coupon bonds that will mature in 6 years and have a face value of $100 each. Bond yields are 5% pa, given as an APR compounding every 6 months, and the yield curve is flat.
How many bonds should the firm issue?
Question 850 gross domestic product, gross domestic product per capita
Below is a table showing some countries’ GDP, population and GDP per capita.
Countries' GDP and Population | |||
GDP | Population | GDP per capita | |
USD million | millions of people | USD | |
United States | 18,036,648 | 325 | 55,492 |
China | 11,158,457 | 1,383 | 8,066 |
Japan | 4,383,076 | 127 | 34,586 |
Germany | 3,363,600 | 83 | 40,623 |
Norway | 500,519 | 5 | 95,027 |
Source: "GDP and its breakdown at current prices in US Dollars" United Nations Statistics Division. December 2016.
Using this data only, which one of these countries’ citizens have the highest living standards?