According to the CAPM, which of the following risks is irrelevant?   Select one: a. Unsystematic risk   b. Systematic risk   c. All risks are always relevant   d. Market risk

Q: A firm has $100 million in current liabilities, $200 million in long-term debt, $300 million in…

A: Long Term debt = $200 million Equity = $300 million

Q: If the opportunity cost of capital is 11%, and you have unlimited access to the capital, which…

A: Please note that as per the guidelines, I am required to answer only the first 3 questions. The NPV…

Q: A high acco counts receivable receivable turnover ratio indicates A. customers are making payments…

A: Account Receivable Turnover Ratio: The ratio is calculated as follow with the help of credit sales…

Q: Cobali Industries had sales of 158,700 units at a price of   $10,91   per unit. It faced fixed…

A: Here, Particulars Values Sales units 158700 Selling price per unit $ 10.91 Fixed operating…

Q: 2) Chris had these daily balances on his credit card for his last billing period. He did not pay the…

A: The average daily balance refers to the balance that the credit card is assumed to have. It allows…

Q: Assume that you have an opportunity to buy the stock of​ CoolTech, Inc., an IPO being offered for…

A: Value of firm = value of equity + value of debt + value of Preferred stocks.

Q: Find the price of a bond whose face value is £100, it pays semi-annual coupons at a rate of 1.5%…

A: Issue price of bonds would be present value of interest annuity & maturity amount at market rate…

Q: a) A Zero Coupon Bond with face value £100 and maturity in 4 years is sold for £85. Find its (gross)…

A: Here, Particulars Values Present value of bond (PV)  £85.00 Face value  (FV)  £100.00 Time…

Q: You can save a significant amount of mortgage interest paid if you make one additional principal and…

A: The monthly payment is the payment that has to be paid every month until the loan amortized which…

Q: Suppose you wish to have $17,250 in 5 years. Use the present value formula to find how much you…

A: Compound = semiannually = 2 Future value = fv = $17,250 Time = t = 5 * 2 = 10 Interest rate = r = 5…

Q: You have the choice amount the five projects below. Which project should be selecte the projects are…

A: Independent project refers to the type of capital budgeting that defines the project which is not…

Q: Company S stock traded at $31.50 and with a PE of 12. Company S bought back 10% of their stock. If…

A: Stock price refers to the price at which the stocks are being bought and sold between the…

Q: Approximately, what is the value of (P) if F=114120, n=8 years, and i= 7% per year? O a. 79703 b.…

A: Given, P is present value. F is future value, i is interest rate and n is number of periods.   F =…

Q: Iron Manufacturers made two announcements concerning its common stock today. First, the company…

A: Next year dividend = d1 = $2.10 Growth rate = g = 2.5% Rate of return = r = 10%

Q: n investor knows that she will need £20,000 in ten years and looks at possible savings plans. The…

A: More is the compounding than more is the effective interest rate and more is the future value of the…

Q: What are the internal rates of return (IRR) on the three projects? Does the IRR rule in this case…

A: Introduction: IRR  of a project is the discount rate which makes net present value of the project…

Q: If a trader developed a series of algorithms and bots to help her profit from predictable price…

A: Trading in a range-bound market refers to a situation where the price of a financial instrument,…

Q: A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a…

A: The Sharpe ratio calculates risk-adjusted performance by dividing the additional earnings on a…

Q: S1: Cost price variance is computed by deducting cost of sales this year at last year's cost price…

A: Cost Price Variance is that which shown the difference between the Actual cost of sales &…

Q: Jason makes six EOY deposits of $2,000 each in savings account paying 5% compounded annually. If the…

A: Annually deposit = d = $2000 Interest rate = r = 5%

Q: Your father has RM500,000 and wants to retire. He expects to live for another 20 years, and to be…

A: The maximum amount that can be withdrawn depends on the time period and interest rate of the period…

Q: An individual borrows £15,000 to be repaid in 10 years with monthly payments at the end of each…

A: Here, Particulars Values Borrowed amount (PV)  £15,000.00 Number of years 10.00 Number of…

Q: O $3,433.89 O $3,630.56 $3,636.11 $3,793.72

A: In period less than one simple ordinary interest is applied and computations is done based on number…

Q: Williams Corp. is considering signing contracts that will obligate the firm to purchase 100000 Swiss…

A: Exchange rate is the conversion rate at which one currency is converted into another currency at…

Q: 15. You need a metal cutting machine for your operations. Your current machine is worn out so you…

A: Equivalent annual cost refers to the method of capital budgeting used for calculating the cost that…

Q: You have just received notification that you have won the $2.19 million first prize in the…

A: Present value is current value of future cash flow discounted at an appropriate discount rate; in…

Q: Budget planning is an essential process for an organisation, with many advantages. However, there…

A: The budgeting process is important for the organizations. It is because it helps organizations…

Q: Question 30 The graph below shows the value of a 2-month, $40-strike call option as a function of…

A: Here, Strike Price is $40 Time To Maturity is 2 months Risk Free Rate is 8% Standard Deviation is…

Q: If the present discounted value of $1,562 received 7 years from now is $1,123, what is the interest…

A: Here, Particulars Values Future value (FV)  $1,562.00 Present discounted value (PV)…

Q: ABC Co. has average shareholders' equity of 1,000,000, which includes $200,000 par value of 12%…

A: Average shareholders' equity P1,000,000 Less: Preferred shares P200,000 Ordinary stockhodler's…

Q: KIC Inc. plans to issue $5.0 million of bonds with a coupon rate of 10 percent paid semiannually and…

A: Price of bond is the present value of coupon payment and present value of par value of bond based on…

Q: What is the rate of interest on a loan of $2,000, for 282 days, if the amount of interest is…

A: When the lender lends a loan to the borrower, he charges a rate of interest on the borrowed amount.…

Q: Find the period Thomas has started working, and he will be putting $100 aside, at the end of every…

A: Here, Particulars Values Present value (PV) $ 0 Monthly deposits (PMT) $ 100.00 Future…

Q: You are examining a new project. You expect to sell 7,000 units per year at €60 net cash flow apiece…

A: The difference between the current value of cash inflows and outflow of cash over a period of time…

Q: Filer Manufacturing has 4,766,598 shares of common stock outstanding. The current share price is…

A: The capital structure is defined as the combination of debt and equity that is used during the…

Q: (a) Mr Adani invests in two risky securities with the following details: Security 1: r1=0.16;…

A: A portfolio is a combinations of various securities in one basket. A portfolio is created to reduce…

Q: Imprudential, Inc., has an unfunded pension liability of $567 million that must be paid in 20 years.…

A: Introduction and data given: Present value is the current value of future cash flow discounted at a…

Q: share. She owns RM15,000 to invest and the minimum initial margin requirement is 50%. She held the…

A: The stock price to get margin call is calculated as shown below. Stock price to get margin…

Q: When a stock is going through a period of nonconstant growth for T periods, followed by constant…

A: The dividend discount model (DDM), a mathematical technique for predicting the price of a company's…

Q: A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a…

A: The minimum variance portfolio refers to the mix of investments that provide the lowest risk to the…

Q: Which of the following is uses electronic trading 1.The JSE 2.The Nasdaq 3.The NYSE 4.The…

A: The American stock exchange known as Nasdaq (National Association of Securities Dealers Automated…

Q: How did we find the NPV here for $17997? How did we find the NPV here for $17997? (Please calculate…

A: The difference between the current value of cash inflows and outflow of cash over a period of time…

Q: The response provided is very brief, i need more explanation and analysis

A: A financial report is a formal document that provides information about the financial performance…

Q: A 15-year bond with a face value of $1,000 currently sells for $850. Which of the following…

A: A bond's yearly interest rate, calculated as a percentage of the face value and paid from the…

Q: Part 1   Under the current (leveraged) capital structure, how much does Lando receive in dividends…

A: Please note that under the guidelines only up to 3 sub-questions can be answered. Kindly repost the…

Q: A telephone company purchased a microwave radio equipment for P 6M. Freight and installation charges…

A: As per the given information: Microwave radio equipment purchased for - P6MFreight and installation…

Q: The management of Kunkel Company is considering the purchase of a $25,000 machine that would reduce…

A: 1. Calculation of Net present Value   YEAR AMOUNT P.V FACTOR PRESENT VALUE         0 25,000 1…

Q: A 30-year maturity bond with a face value of $1,000 making annual coupon payments with a coupon rate…

A: “Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: Question 13 RWJ 13-6 TF In the Capital Asset Pricing Model, the slope of the SML is also the…

A: According to bartleby guidelines,  if multiple questions are asked,  then 1st question needs to be…

Classification Of Risk

Risk means when there could be a possibility that the returns expected from a particular project or investment may or may not match the investor's expectations. In other words, the uncertainty of an income arising from a source that would either be lower than expected or result in losses in risk exposure of the project. The higher the risk involved, the higher is the return expected by the investor as the investor is exposed to a high level of risk. There are various methods by which different types of risk can be assessed and avoided or mitigated.