Fight Finance

(a) Pay out the excess cash by increasing the regular dividend, and cutting it later.

(b) Pay out a special dividend.

(c) Conduct an on or off-market share repurchase.

(d) Conduct a share dividend (also called a 'bonus issue').

(e) Either b or c.

(a) $513.80

(b) $525.36

(c) $541.50

(d) $605.48

(e) $704.69

(a) 0.0005

(b) 0.0006

(c) 0.1603

(d) 0.1738

(e) 0.1909

(a) $838,907.00

(b) $838,986.09

(c) $841,754.97

(d) $889,996.44

(e) $944,108.22

(a) An effective annual rate could be called: "a yearly rate compounding per year".

(b) An APR compounding monthly could be called: "a yearly rate compounding per month".

(c) An effective monthly rate could be called: "a yearly rate compounding per month".

(d) An APR compounding daily could be called: "a yearly rate compounding per day".

(e) An effective 2-year rate could be called: "a 2-year rate compounding every 2 years".

(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) A yield curve graph shows bonds' spot yields at different maturities. The y-axis shows spot yields and the x-axis shows the bonds' times to maturity.

(b) A yield curve is a graph of forward rates.

(c) Normal yield curves slope upwards, they have a positive gradient.

(d) A yield curve is 'as at' a certain date, it's a snapshot in time.

(e) Every point on the yield curve corresponds to a different bond with a different maturity.

(a) 230.258509% pa

(b) 10.536052% pa

(c) 10.517092% pa

(d) 10.468982% pa

(e) 9.531018% pa

(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) To buy consumables like food and clothes at the shops.

(b) For a ‘rainy day’ such as becoming sick and having to pay for a doctor.

(c) To preserve their wealth, such as keeping cash under the bed, in the piggy bank or in a safe.

(d) To invest in assets such as houses, shares or bonds if they become cheap.

(e) To gamble and waste on the poker machines at the casino.