Answer:
$9,352.27
Explanation:
25% of 1.2million
25/100×$1,200,000
=$900,000
Monthly mortgage Payment (p)=r(PV)/{1-(1+r)^-n}
Present value (PV)=$900,000
r=7.2%/12
=7.2/100÷12
=0.072/12
r=0.006
n= 144(12 years×12months)
P=r(PV)/{1-(1+r)^-n}
=0.006×$900,000/{1-
(1+0.006)^-144
=$5,400/{1 - (1.006)^-144}
=$5400/{1 - 0.4226}
=$5,400/0.5774
=$9,352.27
Answer:
A. A bond which has a price of $850, a Yield to Maturity of 4%, and a Current Yield of 3.75%
Explanation:
Since George is focussed on achieving a high total return for his portfolio, he will consider adding a bond whose yield to maturity (YTM) is the highest. Among these options, option A would be ideal since it has a 4% YTM; he would probably not consider if the price of $850 is high or not . This is the annual interest rate paid on the bond investment.
I am not Sure What the question is explain a little better
Answer:
Projects Y and Z
b. Projects W and Z
c. Projects W and Y
Explanation:
CAPM equation : Expected return = Risk free rate + Beta x (Expected market return - Risk free rate)
W = 4% + [0.85 x (11% - 4%)] = 9.95%
X = 4% + (0.92 x 7%) = 10.44%
Y = 4% + (1.09 x 7%) = 11.63%
Z = 4% + (1.35 x 7%) = 13.45%
Projects Y and Z have an expected return greater than 11%
b. Projects W and Z should be accepted because its expected return is higher than the IRR
c. Project W would be incorrectly rejected because the expected rate of return is less than the overall cost of capital (i.e. 9.95 is less than 11). But its expected rate of return is greater than the IRR
Y would be incorrectly accepted because its expected rate of return is greater than the overall cost of capital but its expected rate of return is less than the IRR
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Answer and Explanation:
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