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4 years ago

The Role of Risk

Business

2 answers:

nlexa [21]4 years ago

7 0

Answer:

1 2 4 i just did it

Explanation:

Nostrana [21]4 years ago

3 0

Answer:

The Role of Risk :

Which statements describe the role of risk in making investment decisions?

Risk is an element to consider when investing in stocks.

The higher an investment's risk, the greater its potential return will be.

Explanation:

Every business has its own risk but it differs as a result of the type of business and profit involved, there is a risk in every investment and the higher the risk the greater its potential return

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An annual has 15 years to maturity. It has a coupon rate of 5%, a YTM of 8%. Fill in the cells highlighted in yellow, and aswer

grin007 [14]

Answer:

Market value at 8% YTM $ 743.2156

at 10% YTM $ 619.6960

Explanation:

Assuming the face value is 1,000 as common outstanding American company's bonds:

Market value under the current scenario:

Present value of the coupon payment:

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

Coupon: $1,000 x 5% = 50

time 15 years

rate 0.08

$50 \times \frac{1-(1+0.08)^{-15} }{0.08} = PV\\$

PV $427.9739

Present Value of the Maturity

$\frac{Maturity}{(1 + rate)^{time} } = PV$

Maturity 1,000.00

time 15.00

rate 0.08

$\frac{1000}{(1 + 0.08)^{15} } = PV$

PV 315.24

PV c $427.9739

PV m $315.2417

Total $743.2156

If the interest rate in the market increaseby 2% then investor will only trade the bonds to get a yield 2% higher that is 10% so we recalculate the new price:

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C 50.000

time 15

rate 0.1

$50 \times \frac{1-(1+0.1)^{-15} }{0.1} = PV\\$

PV $380.3040

$\frac{Maturity}{(1 + rate)^{time} } = PV$

Maturity 1,000.00

time 15.00

rate 0.1

$\frac{1000}{(1 + 0.1)^{15} } = PV$

PV 239.39

PV c $380.3040

PV m $239.3920

Total $619.6960

Giving a lower price than before

3 0

3 years ago

A $200,000 loan amortized over 13 years at an interest rate of 10% per year requires payments of $21,215.85 to completely remove

kvasek [131]

Answer:

Loan amount = $184,193.95

Explanation:

Interest will remain same each year. Interest per year = 200,000*10% = $20,000

Installment $21,215.85

Less: Interest $20,000

Payment to Principal $1,215.85

Total principal repaid in 13 years = $1,215.85 * 13 years = $15,806.05

So, the principal left = $200,000 - $15,806.05 = $184,193.95

3 0

3 years ago

6. If two portfolios are well-diversified with a risk-free rate of 3.11% and the S&P market return for the past year has bee

SSSSS [86.1K]

Answer:

Answer 1---- D. none of the above

Answer 2---- B. the project will delay by one day

Explanation:

See attached image

4 0

4 years ago

Which one of the following terms is defined as the mixture of a firm's debt and equity financing? Multiple Choice Working capita

Studentka2010 [4]

Answer:

Capital structure

Explanation:

The capital structure of a company defines the way the equity and debt component of the total capital is proportionalized. Capital structure refers to a company's outstanding debt and equity. It allows a firm to understand what kind of funding the company uses to finance its overall activities and growth. In other words, it shows the proportions of senior debt, subordinated debt and equity (common or preferred) in the funding.

8 0

3 years ago

A pre-determined overhead rate includes:_____.

KiRa [710]

Answer:

a. estimated total manufacturing overhead cost in the numerator.

Explanation:

The formula to compute the pre-determined overhead rate is shown below;

As we know that

Pre-determined overhead rate is

= Estimated total manufacturing overhead cost ÷ estimated activity level

Here estimated activity level can be estimated direct labor hours, estimated machine hours etc

Therefore the option a is correct

8 0

3 years ago