Questions

Risk and Return. True or false? Explain or qualify as necessary.

QUESTION Risk and Return. True or false? Explain or qualify as necessary. a. Investors demand higher expected rates of return on stocks with more variable rates of return. . b. The capital asset pricing model predicts that a security with a beta of zero will provide an expected return of zero. c. An investor who […]

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Date: September 2nd, 2020

What is the project s expected NPV?

QUESTION Decision Tree. Zoom Technologies, Inc., is considering expanding its operations into digital music devices. Zoom anticipates an initial investment of $1.3 million and, lit best. An optional life of 3 years for the project. Zoom”s management team has considered several probable outcomes over the life of the project. which it has labeled as either […]

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Date: September 2nd, 2020

what is the annual continuously compounded interest rate?

QUESTION Put-Call Parity A put option with a maturity of five months sells for $6.33. A call with the same expiration sells for $9.30. If the exercise price is $75 and the stock is currently priced at $77.20, what is the annual continuously compounded interest rate? Basic Concept: We find the discount factor by the […]

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Date: September 2nd, 2020

The cost of production is 80 percent of the selling price. What is Vitales average accounts

QUESTION Size of Accounts Receivable Vitale, Baby!, Inc., has weekly credit sales of $20,000, and the average collection period is 35 days. The cost of production is 80 percent of the selling price. What is Vitales average accounts receivable figure? Average collection Period = 365/Receivable Turnover Ratio 35 Days = 365/Receivable Turnover Ratio Receivable Turnover […]

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Date: September 2nd, 2020