Fight Finance

(a) $25.6033

(b) $20.7476

(c) $20.0000

(d) $19.8835

(e) $18.3126

(a) Day of the payment date, between the payment date's morning opening price and afternoon closing price.

(b) Night before the payment date, between the previous day's afternoon closing price and the payment date's morning opening price.

(c) Day of the ex-dividend date, between the ex-dividend date's morning opening price and afternoon closing price.

(d) Night before the ex-dividend date, between the last with-dividend date's afternoon closing price and the ex-dividend date's morning opening price.

(e) Day of the last with-dividend date, between the with-dividend date's morning opening price and afternoon closing price.

(a) The rental yield will fall and approach zero.

(b) The total return will fall and approach the capital return (5% pa).

(c) One or all of the following must fall: the systematic risk of real estate, the risk free rate or the market risk premium.

(d) If the country's nominal wealth growth rate is 4% pa and the nominal real estate growth rate is 5% pa then real estate will approach 100% of the country's wealth over time.

(e) If the country's nominal gross domestic production (GDP) growth rate is 4% pa and the nominal real estate rent growth rate is 2% pa then real estate rent will approach 100% of the country's GDP over time.

(a) The market value of equity of a listed company's common stock is equal to the number of common shares multiplied by the share price.

(b) The book value of equity is the sum of contributed equity, retained profits and reserves.

(c) A company's book value of equity is recorded in its income statement, also known as the 'profit and loss' or the 'statement of financial performance'.

(d) A new company's market value of equity equals its book value of equity the moment that its shares are first sold. From then on, the market value changes continuously but the book value is recorded at historical cost which typically only changes due to retained profits.

(e) To buy all of the firm's shares, generally a price close to the market value of equity will have to be paid.

(a) total required yield

(b) cost of capital

(c) discount rate

(d) opportunity cost of capital

(e) accounting rate of return

(a) A sunk cost.

(b) An opportunity cost.

(c) A negative side effect.

(d) A capital expense.

(e) A depreciation expense.

(a) ##f_{LC,T}=max⁡(S_T-X_T,0)##

(b) ##f_{LC,T}=max⁡(X_T-S_T,0)##

(c) ##f_{LC,T}=-max⁡(S_T-X_T,0)##

(d) ##f_{LC,T}=-max⁡(X_T-S_T,0)##

(e) ##f_{LC,T}=min⁡(X_T-S_T,0)##

(a) 16% pa

(b) 12% pa

(c) 8% pa

(d) 5% pa

(e) 4% pa

(a) It's 'out of the money'.

(b) It will give a positive profit: ##-c_0 + max(S_T-K_T,0) > 0##.

(c) It will give a positive payoff at maturity: ##max(S_T-K_T,0) > 0##.

(d) The underlying asset price is below the option strike price: ##S_T < K_T##.

(e) The underlying asset price is above the break-even price.

(a) Borrow 1m AUD and lend 0.8m USD.

(b) Borrow 1m USD and lend 1.25m AUD.

(c) Borrow 1m AUD and lend 1m AUD.

(d) Borrow 1m USD and lend 1m USD.

(e) Borrow 1m AUD and lend 1.25m AUD.