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Government bonds currently have a return of 5% pa. A stock has an expected return of 6% pa and the market return is 7% pa. What is the beta of the stock?

Question 147 bill pricing, simple interest rate, no explanation

A 30-day Bank Accepted Bill has a face value of $1,000,000. The interest rate is 8% pa and there are 365 days in the year. What is its price now?

Question 272 NPV

Suppose you had $100 in a savings account and the interest rate was 2% per year.

After 5 years, how much do you think you would have in the account if you left the money to grow?

Question 313 foreign exchange rate, American and European terms

Question 358 PE ratio, Multiples valuation

Estimate the Chinese bank ICBC's share price using a backward-looking price earnings (PE) multiples approach with the following assumptions and figures only. Note that the renminbi (RMB) is the Chinese currency, also known as the yuan (CNY).

The 4 major Chinese banks ICBC, China Construction Bank (CCB), Bank of China (BOC) and Agricultural Bank of China (ABC) are comparable companies;
ICBC 's historical earnings per share (EPS) is RMB 0.74;
CCB's backward-looking PE ratio is 4.59;
BOC 's backward-looking PE ratio is 4.78;
ABC's backward-looking PE ratio is also 4.78;

Note: Figures sourced from Google Finance on 25 March 2014. Share prices are from the Shanghai stock exchange.

Question 647 open interest, trade volume, future

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?

Question 654 future, forward

Which of the following statements about futures and forward contracts is NOT correct?

Question 801 negative gearing, leverage, capital structure, no explanation

The following steps set out the process of ‘negative gearing’ an investment property in Australia. Which of these steps or statements is NOT correct? To successfully achieve negative gearing on an investment property:

(a) Buy an investment property with low expected future capital gains and high rental income, funded using a low proportion of debt (mortgage loan);

(b) Rent the investment property to a tenant;

(c) Negative gearing is achieved when the property investment’s annual taxable profit is negative, due to the loan’s interest expense being greater than the net rent (rental revenue less the renting expenses such as maintenance);

(d) Deduct the property’s income loss from the investor’s separate personal wage from labour. This means that the investor will pay less personal income tax than if they didn’t make the levered property investment;

(e) The investment property will be a positive-NPV investment if the capital gains are greater than the income losses on an after-tax, risk-adjusted, present-value basis.

Question 836 VaR, no explanation

The 95% daily VaR corresponds to the result on the:

Question 962 foreign exchange rate, real estate

Major City Apartment Prices
One bedroom, one bathroom, around 55 square metre floor space, Dec 2018
City	Advertised price	Currency	FX quote
London, Great Britain	995,500	GBP	1.3 USD per GBP
Paris, France	639,000	EUR	0.88 USD per EUR
San Francisco, USA	859,000	USD	1 USD per USD
Shanghai, China	6,300,000	RMB	6.9 RMB per USD
Sydney, Australia	670,000	AUD	0.72 USD per AUD
Tokyo, Japan	50,800,000	JPY	112 JPY per USD

Which city has the most expensive apartment, measured in United States Dollars (USD)? Pay attention to the FX quotes.