A project's net present value (NPV) is negative. Select the most correct statement.
A project has the following cash flows:
Project Cash Flows | |
Time (yrs) | Cash flow ($) |
0 | -90 |
1 | 30 |
2 | 105 |
The required return of a project is 10%, given as an effective annual rate. Assume that the cash flows shown in the table are paid all at once at the given point in time.
What is the Profitability Index (PI) of the project?
The Australian cash rate is expected to be 6% pa while the US federal funds rate is expected to be 4% pa over the next 3 years, both given as effective annual rates. The current exchange rate is 0.80 AUD per USD.
What is the implied 3 year forward foreign exchange rate?
What type of present value equation is best suited to value a residential house investment property that is expected to pay constant rental payments forever? Note that 'constant' has the same meaning as 'level' in this context.
In the dividend discount model (DDM), share prices fall when dividends are paid. Let the high price before the fall be called the peak, and the low price after the fall be called the trough.
###P_0=\dfrac{C_1}{r-g}###
Which of the following statements about the DDM is NOT correct?
Question 767 idiom, corporate financial decision theory, no explanation
The sayings "Don't cry over spilt milk", "Don't regret the things that you can't change" and "What's done is done" are most closely related to which financial concept?
Below are some statements about European-style options on non-dividend paying stocks. Assume that the risk free rate is always positive. Which of these statements is NOT correct?
The market's expected total return is 10% pa and the risk free rate is 5% pa, both given as effective annual rates.
A stock has a beta of 0.7.
In the last 5 minutes, bad economic news was released showing a higher chance of recession. Over this time the share market fell by 2%. The risk free rate was unchanged. What do you think was the stock's historical return over the last 5 minutes, given as an effective 5 minute rate?
Major City Apartment Prices | |||
One bedroom, one bathroom, around 55 square metre floor space, Dec 2018 | |||
City | Advertised price | Currency | FX quote |
London, Great Britain | 995,500 | GBP | 1.3 USD per GBP |
Paris, France | 639,000 | EUR | 0.88 USD per EUR |
San Francisco, USA | 859,000 | USD | 1 USD per USD |
Shanghai, China | 6,300,000 | RMB | 6.9 RMB per USD |
Sydney, Australia | 670,000 | AUD | 0.72 USD per AUD |
Tokyo, Japan | 50,800,000 | JPY | 112 JPY per USD |
Which city has the most expensive apartment, measured in United States Dollars (USD)? Pay attention to the FX quotes.