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Compare a stock insurer to a mutual insurer with respect to each of the following:a. Parties who legally own the companyb. Right to assess policyholders additional premiumsc. Right of policyholders to elect the board of directors
Basic Finance, Finance
A 2-year Treasury security currently earns 1.97 percent. Over the next two years, the real risk-free rate is expected to be 1.00 percent per year and the inflation premium is expected to be 0.60 percent per year. Calcula ...
1.) An analyst has modeled XYZ stock using the Fama & French three factor model (FF3FM). Over the past few years the risk premium on SMB was 2.75% and the risk premium on HML was 3.50%. Regression analysis shows that XYZ ...
Suppose Community Bank offers to lend you $10,000 for one year at a nominal annual rate of 8.00%, but you must make interest payments at the end of each quarter and then pay off the $10,000 principal amount at the end of ...
You are about to invest some money in a bond fund. The management fee of the fund is quite low, it only charges a fee of 2%/year on the assets managed. However, you do not believe the bond fund manager has superior abili ...
Why does the binomial option pricing formula discount the expected cash flows using the risk-free rate?
Question - Four days ago you entered into a futures contract to buy €125,000 at $1.10 per euro. The spot exchange rate when you entered the contract was $1.07. Your initial performance bond was $5,800 and your maintenanc ...
If you insulate your office for $18,000, you will save $1,800 a year in heating expenses. These savings will last forever. a. What is the NPV of the investment when the cost of capital is 4%? 10%? b. What is the IRR of ...
If Hairbran Stylists is evaluating a project that costs $42,000 and the project will generate $11,000 over each of the next 5 years with a required rate of return of 9%, should they accept the project? What is the net pr ...
You are berish on telecom and decide to shell short 100 shares at the current market price of $31 per share. a. How much in cash or securities must you put into your brokerage if the broker initial margin requirement is ...
Quality Home Made Ice Cream has plans to pay decreasing annual dividends of $1.50, $1.25, and $1.00 over the next three years, respectively. After that, the firm will increase the dividend by 4% each year. What is the va ...
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Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate
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