Fight Finance

(a) The dividend yield is equal to ##(r-g)##.

(b) The dividend yield is equal to ##\left( \dfrac{d_1}{p_0} \right)##.

(c) The total return of the stock is equal to ##(r)##.

(d) The total return of the stock is equal to ##\left( \dfrac{d_1+p_0.g}{p_0} \right)##.

(e) The total return of the stock is equal to ##(r+g)##.

(a) 246,567.70,   93,351.63

(b) 246,567.70,   235,741.91

(c) 248,563.73,   96,346.75

(d) 248,563.73,   238,323.24

(e) 256,580.38,   245,314.97

(a) a ten-year bond with a $4000 face value whose yield to maturity is 6.0% and coupon rate is 6.5% paid semi-annually.

(b) a 6-year bond with a principal of $40,000 and a price of $45,000.

(c) a 15-year bond with a $10,000 face value whose yield to maturity is 8.0% and coupon rate is 10.0% paid semi-annually.

(d) a two-year bond with a $50,000 face value whose yield to maturity is 5.2% compounding semi-annually which has a price of $50,000.

(e) None of the above bonds are trading at par.

(a) $94.6187

(b) $90.1062

(c) $72.592

(d) $70.3185

(e) $53.1754

(a) ##V_0 = \dfrac{C_1}{r} \left(1-\dfrac{1}{(1+r)^T} \right) ##

(b) ##V_0 = \dfrac{C_1 \left(1-\dfrac{1}{(1+r)^T} \right)}{r}##

(c) ##V_0 = C_1\dfrac{\left(1-(1+r)^{-T} \right)}{r}##

(d) ##V_0 = C_1 \left(1-(1+r)^{-T} \right) r^{-1}##

(e) ##V_0 = C_1 \left(r^{-1}-(1+r)^{-T-1} \right)##

(a) The single cash flow equation.

(b) The level annuity equation.

(c) The annuity with growth equation.

(d) The level perpetuity equation.

(e) The perpetuity with growth equation.

(a) total required yield

(b) cost of capital

(c) discount rate

(d) opportunity cost of capital

(e) accounting rate of return

(a) Bought the right to buy the underlying asset from her at maturity if he wants.

(b) Bought the right to sell the underlying asset to her at maturity if he wants.

(c) Sold the right that allows her to buy the underlying asset from him at maturity if she wants.

(d) Sold the right that allows her to sell the underlying asset to him at maturity if she wants.

(e) Sold a contract that obliges him to buy the underlying asset from her at maturity if she wants.

(a) $758.30

(b) $773.62

(c) $889.87

(d) $944.90

(e) $1,003.33

(a) Depreciate against the USD to be, say, 99 JPY per USD.

(b) Depreciate against the USD to be, say, 101 JPY per USD.

(c) Appreciate against the USD to be, say, 99 JPY per USD.

(d) Appreciate against the USD to be, say, 101 JPY per USD.

(e) Remain at 100 JPY per USD.