A wholesale glass importer offers credit to its customers. Customers are given 30 days to pay for their goods, but if they pay within 5 days they will get a 1% discount.
What is the effective interest rate implicit in the discount being offered? Assume 365 days in a year and that all customers pay on either the 5th day or the 30th day. All rates given below are effective annual rates.
Government bonds currently have a return of 5%. A stock has a beta of 2 and the market return is 7%. What is the expected return of the stock?
A share just paid its semi-annual dividend of $5. The dividend is expected to grow at 1% every 6 months forever. This 1% growth rate is an effective 6 month rate.
Therefore the next dividend will be $5.05 in six months. The required return of the stock 8% pa, given as an effective annual rate.
What is the price of the share now?
A semi-annual coupon bond has a yield of 3% pa. Which of the following statements about the yield is NOT correct? All rates are given to four decimal places.
A $100 stock has a continuously compounded expected total return of 10% pa. Its dividend yield is 2% pa with continuous compounding. What do you expect its price to be in 2.5 years?
When does a European option's last-traded market price become a sunk cost?
Question 854 speculation motive for keeping money, no explanation
What is the speculation motive for keeping money? The speculation motive encourages people to keep money available:
Which one of the following businesses is likely to be a public company in Australia, judging by its name?