Homework answers / question archive / 1

1

Finance

Share With

1. The speech mentions that the low cash rate is “helping our trade-exposed industries through the exchange rate channel”. Explain how a lower cash rate can help trade-exposed industries?

2. A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 5.5%. The probability distributions of the risky funds are: Stock fund (5) Bond fund (B) Expected Return 15% 9% Standard Deviation 32% 23% The correlation between the fund returns is 0.15. a. What would be the investment proportions of your portfolio if you were limited to only the stock and bond funds and the portfolio has to yield an expected return of 12%? Investment Proportions % Stocks Bonds %
b. Calculate the standard deviation of the portfolio which yields an expected return of 12%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Standard deviation %

3.Some recent financial statements for Smolira Golf Corp, follow. Assets 2017 2018 SMOLIRA GOLF CORP. 2017 and 2018 Balance Sheets Liabilities and Owners' Equity 2018 2017 Current liabilities $ 37,837 Accounts payable $ 36,722 27.766 Notes payable 19,008 42,632 Other 19,864 Current assets Cash Accounts receivable Inventory $ 42,582 $ 34,385 17,801 36,310 16,200 24,634 Total $ 88,496 $ 108,235 Total $ 75,594 $ 83,416 Long-term debt $ 115,000 $ 145,000 Owners' equity Common stock and paid in surplus Accumulated retained earnings $ 55,000 $ 55,000 307,217 344,452 Net plant and equipment $464,315 $ 519,633 Total $362,217 $399,452 Total assets $552,811 $627,868 Total liabilities and owners equity $ 552,811 $627,868 SMOLIRA GOLF CORP. 2018 Income Statement Sales Cost of goods sold Depreciation $506,454 359,328 44,463
equity $627,868 $506,454 359,328 44,463 SMOLIRA GOLF CORP. 2018 Income Statement Sales Cost of goods sold Depreciation Earnings before interest and taxes Interest paid Taxable income Taxes (25%) $ 102,663 19,683 $ 82.980 20.745 Net Income $ 62.235 Dividends Retained earnings $25,000 37,235 The company's profit marginis percent (Use year-end figures rather than average values where appropriate Enter your answer as a percent rounded to 2 decimal places, e.g. 32.16.) Total asset turnover is (Round your answer to 2 decimal places, e... 32.16.) Equity multiplier is (Round your answer to 2 decimal places...g. 32.16.) Using the DuPont identity, the company's ROE is percent (Enter your answer as a percent rounded to 2 decimal places, o... 32.16.)

4. 

You owe your parents $11,000 (in present day dollars) and want to repay them in equal amounts the first to occur in 3 years from today and the other in 6 years from today. If the interest rate is 13.2% per annum compounding monthly, what will be the amount of each repayment? Select one:

a. $9740

b. $16310

c. $24182

d. $15957