Fight Finance

(a) In 31 months (t=31 months).

(b) In 30 months (t=30 months).

(c) In 28 months (t=28 months).

(d) In 27 months (t=27 months).

(e) In 26 months (t=26 months).

(a) Expected future total return of the market price of equity.

(b) Expected future total return of the book price of equity.

(c) Actual historical total return on the market price of equity.

(d) Actual historical total return on the book price of equity.

(e) Actual historical return on equity (ROE) defined as (Net Income / Owners Equity).

(a) Selling government bonds.

(b) Buying a call option on the company's assets.

(c) Buying a put option on the company's assets.

(d) Selling a call option on the company's assets.

(e) Selling a put option on the company's assets.

(a) RMB 8,819,444

(b) RMB 6,350,000

(c) RMB 4,572,000

(d) RMB 218,723

(e) RMB 113,386

(a) 0.7157 USD per AUD

(b) 0.73 USD per AUD

(c) 0.7446 USD per AUD

(d) 0.9804 USD per AUD

(e) 1.02 USD per AUD

(a) The geometric average of the gross discrete returns (GAGDR) equals 1.04075 which is 104.075%.

(b) ##\exp \left( \text{GAGDR} \right) = \text{AALGDR}##. The natural exponent of the GAGDR equals the arithmetic average of the logarithms of the gross discrete returns (AALGDR).

(c) ##\text{GAGDR}^T = \left( P_T/P_0 \right)##. The GAGDR raised to the power of the number of time period that it's measured over equals the ratio of the first and last prices.

(d) ##\text{GAGDR} = \exp \left( \text{AALGDR} \right)##. This is always true, regardless of the distribution of the prices or returns. The logarithm of the geometric average of the gross discrete returns (LGAGDR) is always equal to the arithmetic average of the logarithm of the gross discrete returns (AALGDR).

(e) ##\text{AAGDR} \approx \exp \left( \text{AALGDR} + \text{SDLGDR}^2/2 \right)##. This is only approximately true and depends on the distribution of the prices and returns. It's asymptotically true as the time period that the returns are measured over reaches infinity.

(a) ##P_0=\dfrac{C_\text{1,nominal}}{r_\text{nominal} - g_\text{nominal}}##

(b) ##P_0 =\dfrac{C_0 (1+g_\text{nominal} )^1}{r_\text{nominal} - g_\text{nominal}}##

(c) ##P_0=\dfrac{C_\text{1,real}}{r_\text{real} - g_\text{real}}##

(d) ##P_0=\dfrac{C_0 (1+r_\text{real})^1}{r_\text{real} - g_\text{real}}##

(e) ##P_0=\dfrac{C_0(1+r_\text{nominal} )^1}{r_\text{nominal} - g_\text{nominal}} - C_0##

(a) Gross government spending on goods and services only.

(b) Gross government spending on transfer payments only.

(c) Net government spending which is goods and services expenditure less tax revenue.

(d) Net government spending which is transfer payments expenditure less tax revenue.

(e) Net government spending which is total expenditure (goods and services plus transfer payments expenditure) less tax revenue.

(a) Is the weighted average time that an asset’s cash flows are received.

(b) Is measured in units of time, usually years.

(c) Of a zero-coupon bond is equal to the bond’s maturity.

(d) Of a fixed-coupon-paying bond will be more than the bond’s maturity.

(e) Of a portfolio is an arithmetic average of the Macaulay durations of the assets in the portfolio, weighted by their prices.

(a) $200m is the levered firm's asset value.

(b) $100 is the share price.

(c) $5m is the interest expense over the first year.

(d) $2m is the cash flow to debt holders in one year.

(e) $1.8m of bonds must be bought back in one year.