Question 61
A portfolio consists of 2 bonds:Bond | Maturity | Coupon | Duration | Proportion in Portfolio
Bond A | 10 years | 8% | 6.7 | 60% Bond B | 7 years | 5.2% |3.9 | 40%
If there is an upward parallel shift in yields by 61 basis points, what will be percentage change in the portfolio value?
Bond A | 10 years | 8% | 6.7 | 60% Bond B | 7 years | 5.2% |3.9 | 40%
If there is an upward parallel shift in yields by 61 basis points, what will be percentage change in the portfolio value?
Question 62
If the nominal interest rate is 7%, then the effective annual rate is
I). 7.19 % with quarterly compounding.
II). 7.21% with monthly compounding.
III). 7.25 % with continuous compounding
Which one of the following is true?
I). 7.19 % with quarterly compounding.
II). 7.21% with monthly compounding.
III). 7.25 % with continuous compounding
Which one of the following is true?
Question 63
Watson is planning to value Alcan, Inc for the year of 2004. The financial information Watson has assembled for his valuation is as follows (in millions):
EBIT: 500.
*
Interest expense: 150.
*
Depreciation: 200.
*
Income tax rate: 35%.
*
Investment in working capital: 80.
*
Investment in fixed capital: 400.
*
What is the FCFF for the company?
EBIT: 500.
*
Interest expense: 150.
*
Depreciation: 200.
*
Income tax rate: 35%.
*
Investment in working capital: 80.
*
Investment in fixed capital: 400.
*
What is the FCFF for the company?
Question 64
Big Toys, Inc. has a 34 day inventory period and a 23 day receivables period. The company purchases the toys which it sells from The Toy Co. under a 45 day payment arrangement. The Toy Co:
Question 65
The state lottery you just won will make annual payments of $152,000 for the next twenty years. What is the present value of your prize at a discount rate of 8%?