Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

problem: Suppose you have two short term risk free investment choices. 1st is a one year zero coupon Treasury bill, which you can buy today at $950 for each 1000 dollar at maturity. The 2nd is a one year CD which offers a 5% yearly rate, compounded semiannually. Investor is subject to a 35 percent federal tax and 8 percent state tax. Federal and state taxes will be paid on CD but only federal will be paid on Treasury bill & it will be paid when it is received, thus at maturity date.

Demonstrate [A] returns of cash and [B] which is the best choice?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M919576

Have any Question? 


Related Questions in Basic Finance

1 by how much will the clamping force on the joint be

1 .By how much will the clamping force on the joint be reduced? Sketch the new joint diagram, assuming maximum initial preload ? Compute the estimated maximum bolt tension and minimum clamping force under the 3,000 lbs e ...

Felix sani just received a gift from his grandfather he

Felix Sani just received a gift from his grandfather. He plans to invest in a 5-year bond issued by Nuforce Ltd that pays annual coupons of 5.5 per cent. If the current market rate is 7.25 per cent, what is the maximum a ...

1 commercial loan officers regard profitability financial

1. Commercial loan officers regard profitability financial ratios as very significant. Comment. 2. Which two financial ratios do commercial loan officers regard as the most significant? Which two financial ratios appear ...

1 discuss some advantages and disadvantages to consider

1. Discuss some advantages and disadvantages to consider when considering FDI in a developing nation. 2. Identify a business that is not already franchising but has potential for international franchise success. Support ...

A company has two divisions of equal size a computer

A company has two divisions of equal size: a computer manufacturing division and a data processing division. Its CFO believes that stand-alone data processor companies typically have a WACC of 8%, while stand-alone compu ...

In a latin square each treatment condition occurs first one

In a Latin square, each treatment condition occurs first one time, second one time, third one time, and so on. Ideally, every possible sequence of two treatments should also occur exactly one time. For example, if two tr ...

Answer the following questions as they relate to implied

Answer the following questions as they relate to implied volatilities. a. Can implied volatilities be expected to vary for options on the same stock with the same exercise prices but different expirations? b. Can implied ...

1 using the amortization method construct a depreciation

1. Using the amortization method, construct a depreciation table for a machine whose value is $22,000 with a useful life of 7 years and a scrap value of $3,450. The interest rate is 9%. 2. An asset has a value of $1,500 ...

Smart analysts can massage the numbers in npv analysis to

Smart analysts can massage the numbers in NPV analysis to make any project's NPV look positive. It is better to use a simpler approach like payback or accounting rate of return that gives analysts fewer degrees of freedo ...

1 describe the advantages of the between-subjects design2

1. Describe the advantages of the between-subjects design. 2. Describe the disadvantages of the between-subjects design. 3. How can individual differences create problems in a between-subjects design? 4. Why is it so imp ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen