Peter Gunderson bought 2,000 shares of stock in a transportation company at $45.10 per share. Ten months later he sold the stock at $78.22 per share. If he had to pay his broker a commission of $85, how much profit did Peter make on this investment? Round your answer to the nearest dollar.
Q: Carefully draw the payoff diagram of a portfolio consisting of a long position in two call options…
A: A customized portfolio has to be created with long and short positions in call options on the same…
Q: Please explain this by showing the formula. Don't solve it by using the excel. A 5-year…
A: Data given: Face value=£1,000 N=5 year Coupon rate=8% ( payments made quarterly) Yield=10% Working…
Q: Each of the following factors affects the weighted average cost of capital (WACC) equation. Which of…
A: Several questions appear on the screen. In the first question, external factors outside the control…
Q: Required: Based on the following cash flow graphs, determine whether each of the companies shown…
A: A company's life cycle is divided into primarily four stages that it experiences in its life. These…
Q: M a k e a r e f l e c t i v e j o u r n a l o f t h e s a i d t o p i c s : F o u n…
A: I have reflected on my learnings on various topics related to personal finance and financial…
Q: Explain why the balanced scorecard is so crucial for optimising return on investment.
A: The balanced scorecard is a strategic management tool that helps organizations to align their…
Q: Shatin Intl. has 10.3 million shares, an equity cost of capital of 12.8% and is expected to pay a…
A: Number of shares outstanding = 10.3 million Equity cost of capital = 12.8% Total annual dividend =…
Q: for part b, you entered the figure £45.17... as the D0. where did you get this figure from as its…
A: £45.1716432 is not D0 But D20
Q: A. A with 7 years to maturity B. AAA with 4 years to maturity C. BBB with 8 years…
A: The bond with the highest volatility is the one whose price is expected to fluctuate the most in…
Q: Oriole Corp. Mangement will invest $331,500, $616,950, $213,200, $818,900, $1,240,100, and…
A: Future value represents the expected worth of the current series of cash flows compounded over a…
Q: An initial amount of $1100 is invested in an account at an interest rate of 8% per year, compounded…
A: Present value = pv = $1100 Interest rate = r = 8% Time = t = 3 years
Q: Why portfolio isn't attractive? Please explain on answer
A: Diversified portfolio is the portfolio that lowers the overall risk associated with the investment…
Q: In the market we observe the following term structure of continuously com- pounded spot rates: year…
A: Spot rates of different maturities have been provided. Several forward rates have to be calculated.…
Q: You are investing money at 5.7 percent annual interest, compounded continuously. It will take you…
A: We need the answer in years, therefore, we must find the effective annual rate for the continuous…
Q: H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed…
A: NPV is also known as Net present value. It is a capital budgeting techniques which help in decision…
Q: Suppose that your unsubsidized Stafford loans plus accumulated interest total $ 34000 at the time…
A: A loan is a contract where money is forwarded to one party by another on the promise of repayment at…
Q: The company incurs costs of $18.42 million regardless of the output level. It sells 7.29 million…
A: Combined leverage The type of leverage that helps the company to measure its financial strength is…
Q: Look at the cash flows for projects F and G given below. Cash Flows($) Project C0 C1 C2…
A: Net present value and internal rate of return are the modern methods of capital budgeting that are…
Q: Gunnar Corp uses no debt. The weighted average cost of capital is 9 percent. If the current market…
A: The Weighted Average Cost of Capital (WACC) is a financial metric that represents the average cost…
Q: Suppose you have a portfolio consisting solely 900 long calls with theta of -0.11 and 1200 long puts…
A: Option theta is a measure of how much an option's price is expected to change per day as time…
Q: Suppose you want to purchase a $ 165000 house. If you put 20% down and finance the rest in a 15 year…
A: Price of the house = $165,000 Down payment = 20% Loan amount (PV) = 165,000*(1-0.20) = $132,000…
Q: After-tax cost of debt For the following $1,000-par-value bond, assuming annual interest payment and…
A: The appropriate cost of debt should be the cost of debt-adjusted for taxes, that is, the after-tax…
Q: Assume that you make quarterly payments of $ 750 into an annuity paying 5% interest compounded…
A: Future value refers to an amount of the current asset at some future date. It is helpful in…
Q: Parents decide to start saving money for college education with a $1000 initial investment and in 3…
A: Present value = 1,000 quarterly deposit = 700 total deposits = 700 annual rate = 4.75% Quarterly…
Q: 4. Answer all parts of this question. (a) A trader observes an American option and a European option…
A: The option are said to be the contract which give the holder the diet to exercise the contract. The…
Q: Carefully draw the payoff diagram of a portfolio consisting of a long position in two call options…
A: The payoff diagram for a portfolio consisting of various long and short positions in call options…
Q: A $10,000 X Corporation 9% (2) debenture matures on November 1, 2018. Coupon dates are May 1 and…
A: Bond refers to the financial instrument issued by the government or financial corporation for…
Q: Here are the returns on two stocks. January February March April May June July August Digital Cheese…
A: Variance and standard deviation for both stocks have been computed below: The formulas used for…
Q: H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed…
A: The Net Present Value (NPV) method is a capital budgeting tool that measures the value of an…
Q: The Nolan Corporation finds it is necessary to determine its marginal cost of capital. Nolan’s…
A: The weighted average cost of capital refers to an amount that is paid on average for financing the…
Q: Project L requires an initial outlay at t = 0 of $40,000, its expected cash inflows are $15,000 per…
A: Initial Value = $40,000 Cash Flow = cf = $15,000 Time = t = 9 years WACC = Weighted Average Cost of…
Q: Brewster's is considering a project with a life of 5 years, an initial cost of $128.000, and a…
A: Project life =5 years Initial Cost = $128000 Discounting Factor = 16% Salvage Value at end of 3rd…
Q: Find the interest on the following loan. $1850 at 7.5% for 3 months The interest is $ (Round to the…
A: When the lender lends a loan to the borrower, he charges a rate of interest on the borrowed amount.…
Q: A home costs $148,500 to build and is sold for $168,000. What is the percent markup on selling…
A: Markup percent = [Selling price- cost to built)/cost to built] *100.
Q: 9. The last four years of returns for a stock are as follows: 1 2 -4% +28% a. What is the average…
A: Years Returns 1 -4% 2 28% 3 12% 4 4% Required: a) Average Annual return =? b) The…
Q: Avicorp has a $10 million debt issue outstanding, with a 6% coupon rate. The debt has semiannual…
A: Given, $10 million debt Coupon rate = 6% Current price = 95% of par value.
Q: Good Time Company is a regional chain department store. It will remain in business for one more…
A: Probability of Boom=50% Probability of recession=50% Projected cash flow during the boom=$126…
Q: (a) the expected returns of the stocks A and B;
A: Portfolio is the combination of securities and stock being held by the business. Expected return of…
Q: Management of Sunland, Inc., is considering switching to a new production technology. The cost of…
A: The PP refers to the time it takes for the cash flows of a project to recover the initial…
Q: Suppose you are considering investing $1,000 in a load fund that charges a fee of 7%, and you expect…
A: Investment amount=$1,000 Load fund fee=7% Expected earning rate=13% No-Load fund redemption fee=1%…
Q: The risk-free rate is 3% and you believe that the S&P 500’s excess return will be 10% over the next…
A: Expected return refers to the minimum return earned by an investor on the investment made…
Q: Help me with part E please. Thank you so much a) Discuss the main assumptions of the Capital Asset…
A: You has asked for help in part (e). Hence, the solution focuses only on part (e). In this part, the…
Q: Use the formula for continuous compounding to compute the balance in the account after 1, 5, and 20…
A: The concept of time value of money will be used and applied here. Money deposited today grows in…
Q: Summit Systems will pay a dividend of $1.49 one year from now. If you expect Summit's dividend to…
A: The below expression can be used to calculate price per share: In the calculation of price of share…
Q: Myers Business Systems is evaluating the introduction of a new product. The possible levels of unit…
A: Standard deviation is a measure of the spread of a dataset, defined as the square root of its…
Q: Jonathan purchased some corporate stock 8 years ago for $12,000. He received quarterly dividends of…
A: A share was bought 8 years ago. It had paid quarterly dividends regularly for 5 years, and then…
Q: Big Company is evaluating two projects, Project A and Project B. Both projects are of equal risk.…
A: the independent project if the internal rate of return is greater than of the cost of capital then…
Q: Your Boston-headquartered manufacturing company, Wruck Enterprises, obtained a 55-million-peso loan…
A: Loan Amount = 55000000 peso Exchange rate = 14 US cents/peso Dropped Exchange rate =6 US cents/peso…
Q: A corporate bond maturing in 15 years with a coupon rate of 9.9 percent was purchased for $980 and…
A: Here, Particulars Values Face value (FV) $ 1,000.00 Time to maturity (NPER) 15.00 Coupon…
Peter Gunderson bought 2,000 shares of stock in a transportation company at $45.10 per share. Ten months later he sold the stock at $78.22 per share. If he had to pay his broker a commission of $85, how much profit did Peter make on this investment? Round your answer to the nearest dollar.
Step by step
Solved in 3 steps
- Dée Trader opens a brokerage account and purchases 300 shares of Internet Dreams at $40 per share. She borrows $4,000 from her broker to help pay for the purchase. The interest rate on the loan is 8%.a. What is the margin in Dée’s account when she first purchases the stock?b. If the share price falls to $30 per share by the end of the year, what is the remaining margin in her account? If the maintenance margin requirement is 30%, will she receive a margin call?c. What is the rate of return on her investment?Dee Trader opens a brokerage account and purchases 200 shares of Internet Dreams at $50 per share. She borrows $3,300 from her broker to help pay for the purchase. The interest rate on the loan is 6%. Required: a What is the margin in Dee's account when she first purchases the stock? b. If the share price falls to $40 per share by the end of the year, what is the remaining margin in her account?Sheldon put $500 into a certificate of deposit at his bank. In six months the value of the CD is $620. What is his ROI? Penny invested $10,000 into the stock market. She sold the stock two days later for $13,500. What is her ROI? Leonard bought a bond for $5,000 and sold it for $5,300 four years later. What is his ROI? Howard bought a house for $250,000 and sold it for $227,000 ten years later. What is his ROI? Raj bought a tractor for $25,000 and sold it for $32,000 one year later. What is his ROI? Amy put $50 in a savings account. A year later the balance on the account is $58. What is her ROI?
- One year ago, Richard purchased 40 shares of common stock for $10 per share. During the year, he received one dividend payment in the amount of $0.50 per share. If the stock currently is worth $9 per share, what yield did Richard earn on his investment for the year?What is Rate of Return? Adam is a retail investor and decides to purchase 10 shares of Company A at a per-unit price of $20. Adam holds onto shares of Company A for two years. In that time frame, Company A paid yearly dividends of $1 per share. After holding them for two years, Adam decides to sell all 10 shares of Company A at an ex-dividend price of $25. Adam would like to determine the rate of return during the two years he owned the shares.Three years ago, Simon Brown, a 36-year-old public-relations professional in Washington, D.C., purchased a 1938 Joe DiMaggio baseball card for $1,500. Its value now: $2,500, up about two-thirds, based on sales records for comparable cards, he says.” What is Simon Brown’s annual rate of return on his investment (hint: it is not 2/3)?
- Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of return that she is earning. For example, three years ago she paid $24,000 for 980 shares of Malti Company’s common stock. She received a $823 cash dividend on the stock at the end of each year for three years. At the end of three years, she sold the stock for $22,000. Kathy would like to earn a return of at least 10% on all of her investments. She is not sure whether the Malti Company stock provide a 10% return and would like some help with the necessary computations. Required: 1. Compute the net present value that Kathy earned on her investment in Malti Company stock. 2. Did the Malti Company stock provide a 10% return?Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of return she is earning. For example, three years ago she paid $17,000 for 910 shares of Malti Company's common stock. She received a cash dividend of $701 on the stock at the end of each year for three years. At the end of three years, she sold the stock for $16,000. Kathy would like to earn a return of at least 9% on all of her investments. She is not sure whether the Malti Company stock provides a 9% return and would like some help with the necessary computations. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: 1. Compute the net present value Kathy earned on her investment in Malti Company stock. 2. Did the Malti Company stock provide a 9% return? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the net present value Kathy earned on her investment in Malti…Last year Vivienne bought 100 shares of Holding Corporation common stock for $43 per share. During the year he received dividends of $1.30 per share. The stock is currently selling for $50 per share. What rate of return did Vivienne earn over the year?
- Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of return that she is earning. For example, three years ago she paid $23,000 for 500 shares of Malti Company's common stock. She received a $460 cash dividend on the stock at the end of each year for three years. At the end of three years, she sold the stock for $30,000. Kathy would like to earn a return of at least 13% on all of her investments. She is not sure whether the Malti Company stock provide a 13% return and would like some help with the necessary computations. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: 1. Compute the net present value that Kathy earned on her investment in Malti Company stock. 2. Did the Malti Company stock provide a 13% return? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the net present value that Kathy earned on her investment…Calculate the equity each of these people has in his or her home: a. Fred just bought a house for $200,000 by putting 10% as a down payment and borrowing the rest from the bank. b. Freda bought a house for $150,000 in cash, but if she were to sell it now, it would sell for $250,000. c. Frank bought a house for $100,000. He put 20% down and borrowed the rest from the bank. However, the value of the house has now increased to $160,000 and he has paid off $20,000 of the bank loan.Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of return she is earning. For example, three years ago she paid $33,000 for 880 shares of Malti Company's common stock. She received a cash dividend of $818 on the stock at the end of each year for three years. At the end of three years, she sold the stock for $32,000. Kathy would like to earn a return of at least 7% on all of her investments. She is not sure whether the Malti Company stock provides a 7% return and would like some help with the necessary computations. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: 1. Compute the net present value Kathy earned on her investment in Malti Company stock. 2. Did the Malti Company stock provide a 7% return? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the net present value Kathy earned on her investment in Malti…