You want to buy an apartment priced at $300,000. You have saved a deposit of $30,000. The bank has agreed to lend you the $270,000 as an interest only loan with a term of 25 years. The interest rate is 12% pa and is not expected to change.
What will be your monthly payments? Remember that mortgage payments are paid in arrears (at the end of the month).
On his 20th birthday, a man makes a resolution. He will deposit $30 into a bank account at the end of every month starting from now, which is the start of the month. So the first payment will be in one month. He will write in his will that when he dies the money in the account should be given to charity.
The bank account pays interest at 6% pa compounding monthly, which is not expected to change.
If the man lives for another 60 years, how much money will be in the bank account if he dies just after making his last (720th) payment?
When someone says that they're "buying American dollars" (USD), what type of asset are they probably buying? They're probably buying:
A European put option will mature in ##T## years with a strike price of ##K## dollars. The underlying asset has a price of ##S## dollars.
What is an expression for the payoff at maturity ##(f_T)## in dollars from having written (being short) the put option?
Read the following financial statements and calculate the firm's free cash flow over the 2014 financial year.
| UBar Corp | ||
| Income Statement for | ||
| year ending 30th June 2014 | ||
| $m | ||
| Sales | 293 | |
| COGS | 200 | |
| Rent expense | 15 | |
| Gas expense | 8 | |
| Depreciation | 10 | |
| EBIT | 60 | |
| Interest expense | 0 | |
| Taxable income | 60 | |
| Taxes | 18 | |
| Net income | 42 | |
| UBar Corp | ||
| Balance Sheet | ||
| as at 30th June | 2014 | 2013 |
| $m | $m | |
| Assets | ||
| Cash | 30 | 29 |
| Accounts receivable | 5 | 7 |
| Pre-paid rent expense | 1 | 0 |
| Inventory | 50 | 46 |
| PPE | 290 | 300 |
| Total assets | 376 | 382 |
| Liabilities | ||
| Trade payables | 20 | 18 |
| Accrued gas expense | 3 | 2 |
| Non-current liabilities | 0 | 0 |
| Contributed equity | 212 | 212 |
| Retained profits | 136 | 150 |
| Asset revaluation reserve | 5 | 0 |
| Total L and OE | 376 | 382 |
Note: all figures are given in millions of dollars ($m).
The firm's free cash flow over the 2014 financial year was:
Alice, Bob, Chris and Delta are traders in the futures market. The following trades occur over a single day in a newly-opened equity index future that matures in one year which the exchange just made available.
1. Alice buys a future from Bob.
2. Chris buys a future from Delta.
3. Delta buys a future from Bob.
These were the only trades made in this equity index future. What was the trading volume and what is the open interest?
How much more can you borrow using an interest-only loan compared to a 25-year fully amortising loan if interest rates are 6% pa compounding per month and are not expected to change? If it makes it easier, assume that you can afford to pay $2,000 per month on either loan. Express your answer as a proportional increase using the following formula:
###\text{Proportional Increase} = \dfrac{V_\text{0,interest only}}{V_\text{0,fully amortising}} - 1###Mr Blue, Miss Red and Mrs Green are people with different utility functions. Which of the statements about the 3 utility functions is NOT correct?
Question 749 Multiples valuation, PE ratio, price to revenue ratio, price to book ratio, NPV
A real estate agent says that the price of a house in Sydney Australia is approximately equal to the gross weekly rent times 1000.
What type of valuation method is the real estate agent using?
Question 881 Nixon Shock, Bretton Woods, foreign exchange rate, foreign exchange system history, no explanation
In the ‘Nixon Shock’ on August 15, 1971, the United States government: