Tut3 CR3

Question 1 a. Distinguish between the following:i. Primary market and secondary market ii. Money market and capital market iii. Fixed income security and convertible security iv. Systematic risk and Unsystematic risk b. You are an investment advisor and you are asked to guide a new investor to trade shares on the Ghana Stock Exchange (GSE). Explain any six (6) of the listing requirement of GSE that are to be met before the company can start trading on the market.   Question 2 a. A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests in stocks, bonds, short-term money market instruments and other securities. The performance of these mutual funds and the portfolio they build needs to be evaluated as frequently as possible. Evaluating the performance of these mutual funds is important for both existing and potential investors. The Table below provides the average return, standard deviation and betas of selected…

An arrangement with a broker to borrow stocks from them and then sell it in the market, with the hope that they earn a profit by buying the stock back again after it has fallen in price is called Select one: a. smart money. Ob. short sales. Oc. behavioral finance. Od. random walk.

MINDTAP Q Search this course Zulaikha binti M ian 1 aining: 1:13:50 Save Submit Test for Gradi « Question 36 of 50 Which of the following statements is CORRECT? O a. Money markets are markets for long-term debt and common stocks. O b. Money market mutual funds usually invest their money in a well-diversified portfolio of liquid common stocks. O c. The NYSE operates as an auction market, whereas NASDAQ is an example of a dealer market. d. While the distinctions are becoming blurred, investment banks generally specialize in lending money, whereas commercial banks generally help companies raise capital from other partles. O e. A liquid security is a security whose value is derived from the price of some other "underlying" asset. N W. > 低日见里 be here to search

What options does a firm have to spend its free cash flow​ (after it has satisfied all interest​ obligations)? ​(Select the best choice​ below.)     A. Use it to repurchase shares.   B. Pay it out as dividends.   C. Use it to make investments.   D. All of the above.

Reflection paper about this principle   Principle #2: Expect Volatility (unexpected changes) and Profit from itinvesting in stocks means dealing with volatility. Instead of running for the exits during times of market stress, the smart investor greets downturns as chances to find great investments. Graham illustrated this with the analogy of "Mr. Market," the imaginary business partner of each and every investor. Mr. Market offers investors a daily price quote at which he would either buy an investor out or sell his share of the business. Sometimes, he will be excited about the prospects for the business and quote a high price. Other times, he is depressed about the business's prospects and quotes a low price.

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• Choose a publicly traded company. • Note: Be sure to choose a company that no other classmate has chosen. • Determine its beta from a published source. • Hint: Use Yahoo!Finance or NASDAQ to find the company's beta. ▪ Find the company's financial information by putting the company's name in the search bar. . Calculate the company's cost of equity using the CAPM formula and the short-term risk-free rate assumptions. ▪ Use 8.5 percent as the market risk premium. ▪ Use the current 90-day yield (3-month yield) on U.S. Treasuries as the risk-free rate. Hint: Use the U.S. Department of the Treasury's Resource Center to look up current 90-day (3-month) Treasury Yield Curve Rates. ▪ Provide your calculations in a table in your post. ▪ How Do I Insert a Table Using the Rich Content Editor? B • Calculate the company's cost of equity using the CAPM formula and the long-term risk-free rate assumptions. ▪ Use 7.0 percent as the market risk premium ▪ Use the current 20-year yield on U.S.…

Question 4                                                                                         You are a financial investor who actively buys and sells in the securities market. Now you have a portfolio, including four shares: $7,500 of Share A, $4,800 of Share B, $5,700 of Share C, and $2,500 of Share D.   Required: A)Compute the weights of the assets in your portfolio?  B)If your portfolio has provided you with returns of 7.7%, 10.5%, - 8.7% and 14.2% over the past four years, respectively. Calculate the geometric average return of the portfolio for this period? C)Assume that expected return of the stock A in your portfolio is 13.2%. The risk premium on the stocks of the same industry are 6.8%, beta of this stock is 1.3. Calculate the risk-free rate of return using Capital market pricing model (CAPM). ? D)You have another portfolio that comprises of two shares only: $500 Tesla shares and $700 Eagle shares. Below is the data of your portfolio:     Tesla Eagle Expected…

1. How do you think today's low interest rate environment is impacting the time value of money? How might this change the value of an asset or liability? 2. What is the relationship between the concepts of net present value and shareholder wealth maximization? 3. Offer some reasons that the intrinsic value that you might calculate with the methodologies learned might yield a price different than what the stock trades at in the stock market. You can reference any method of valuation models in offering thoughts on why there might be differences between intrinsic and market values.

answer the questions as soon as possible

3. Forecasting stock value Understanding the returns from investing When buying stock, you can expect to earn money through future current income (from     ) and future capital appreciation (from     ). Together, your total earnings from a given investment can be expressed in terms of the approximate yield. This value makes it easier for you to compare investment options.   Understanding the Approximate Yield Equation The formula for the approximate yield of an investment can look intimidating, but it’s really just a function of three things: (1) average current income, (2) average capital gains, and (3) the average value of the investment. Based on the information in the table, compute each of these values for the two stocks over a 3-year period and enter the values into the bottom half of the table.   Stock 1 Stock 2 Expected average annual dividends (2012–2014) $0.95 $2.65 Current stock price $50 $119 Expected future stock price (2014) $62 $149…

1. Suppose many investors are still interested in acquiring the shares of Company ABC after the initial public offering, what kind of Financial market should they go to from whom would they purchase this shares? 2. What would happen if there are no Financial market in the Financial system?

Answer quickly After making an investment, an investor learns that Intel stock is now undervalued. This is an illustration of a. Market Interruption  b. Portfolio Management  c. Security Analysis  d. Asset Allocation

Solve a,b and c please You wish to create a synthetic equity position. You believe that the price of the stock will decrease over the next year. You have the following securities available to you to create this position. Note that all options are European and Beetroot Inc does not pay dividends.   Current Value of Available Securities Beetroot Inc. Equity: $10.00 Call Premium: $ 5.31 Put Premium: $ 0.50 Strike for Call or Put: $14.00 Call and Put Expiration: 1 year Annual Risk-Free Rate (annually compounded): 3% per year   a) Confirm that the put-call parity holds in this case. b)Specifically, identify the transactions that you will enter into to create your position? c)At expiration, the value of the equity will have increased or decreased. Show how your synthetic position will have the same payoff as a stock-only portfolio. Show this if Beetroot Inc’s equity if the equity value increases to $100 or decreases to $5.

Match the words with the term.   Question 14 options: 12345 venture capital 12345 quality of security to satisfy investors 12345 long term debt financing 12345 uncertainty 12345 share versus debt financing   1. business risk 2. instrument risk 3. risk capital 4. bond 5. financial risk

Question 5  In class, we discussed the CAPM model and its implications. What is the market portfolio? What assets does the model price? Is the S&P 500 a good proxy for the market portfolio, and if not, why? Please elaborate.