Assignment 1 (2023) (1)
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KS TSE 1
Real Estate Finance
Assignment 1/3
HKU, K S Maurice TSE
Note: Grace TSANG will announce the deadline for this assignment and provide you the instruction
for submission.
There will be a total of
THREE assignments
and
ALL
will be counted toward your
final grade. This assignment carries 50 points and represents 5% of your overall grade.
The Excel file “Dataset for Assignment 1” provides the data needed for
the assignment.
Question 1: Property Market Analysis (25 points)
The Excel shee
t “
Q1.
Property Mkt” contains
the following THREE data series downloaded from the
HKSAR website:
(1)
Private Domestic Property Price of Class A, B and C for Kowloon (Quarterly from Q1 1990 to
Q1 2019)
(2)
Hang Seng Index (Quarterly from Q1 1990 to Q1 2019)
(3)
Monthly Salaries of Supervisory Workers (Quarterly from Q1 1999 to Q1 2019)
1.
Compare the performance of the property prices of Class A, Class B and Class C for Kowloon
with the Hang Seng Index in terms of annualized rate of return for the following periods: (10
points)
a.
From Q1 1999 to Q1 2019,
b.
From Q1 2009 to Q1 2019
c.
From Q1 2014 to Q1 2019
2.
Evaluate the annualized growth rates of the average monthly salaries of
Office/administrator supervisor, Accounting Supervisor and Estate officer/building services
officer for the following periods: (10 points)
a.
From Q1 1999 to Q1 2019,
b.
From Q1 2009 to Q1 2019
c.
From Q1 2014 to Q1 2019
3.
How do the salary growth rates compare with the property price of Class A, Class B and Class
C for Kowloon growth rates? (5 points)
Question 2: Property Market Bubble Analysis (25 points)
The Excel sheet “
Q2.
Property Mkt Bubble” contains
the median monthly household income by
household size and the property price per square meter for Class B residential properties in Hong
Kong Island for the annual period from 2001 to 2018.
Consider the median monthly household income for a typical household with
FOUR
economically
active members.
Suppose the household can only commit up to 1/2 of its income to mortgage
payment.
The usual mortgage terms are 25-year, monthly payments, with mortgage rate equal to
Prime Rate (5.625%) minus 2.5%, and 40% down payment.
Assume that the household has enough
savings to make the 40% down payment for property price.
KS TSE 2
(a)
Determine the maximum home price the household can afford each year from 2011 to
2018?
(5 points)
Hint: Based on the median household income and the mortgage terms, the maximum
mortgage an average household can borrow is determined as follows:
??𝑟𝑡𝑔𝑎𝑔𝑒 ??𝑎? = 𝑃?𝑇 [
1 − (1 + 𝑟/12)
−12𝑛
𝑟/12
]
Where r is the annual mortgage rate, n is the mortgage term in year and PMT is the monthly
mortgage payment
(b)
Suppose the
4-member
household wishes to buy and own a class B property in Hong Kong
Island of size
65 square meters
. Plot the time series of the affordable home prices
calculated in (a) and the corresponding class B property prices for the period from 2011 to
2018. (5 points)
(c)
Determine the size of the price bubble for 2016, 2017 and 2018 calculated in (b). (10 points)
(d)
Using the bubble model discussed, determine the market-expected probability that the
bubble would
NOT
burst in 2016/2017 and 2017/2018? (5 points)
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Use the information above to complete the missing values in the table below $2,500 invested 4% interest.
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Question 1
What is the Payback Period for the following investment?
Year
1
2
3
4
5
O a. 3.77
Ob. 3.73
Oc. 3.89
Od. 3.96
Cash Out
$ (1,600,000)
(710,000)
Cash In
550,000
580,000
610,000
640,000
670,000
A Moving to the next question prevents changes to this answer.
000
900
F2
F3
F4
MacBook
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2. Use the worksheet tab Problem 2 A-FV Retirement and
Problem 2 B -PV Invest
K
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2 Return Rate
3 Investment Duration in Years
4 Amount Invested
Future Investment Value
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One-Time Investment Scena
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9Investment Duration in Years
10 Monthly Payroll Deduction
11 Company Match
12 Monthly Investment
13 Current Balance
14 Future Investment Value
15
Sheet1
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Sheet2
Accessibility: Investigate
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xW Quiz 3-MAT-143, section 03F, Fa X
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DETAILS
MY NOTES
You deposit $850 in an account paying an annual simple interest rate of 7.8%. Find the future value of the investment (in dollars) after 1 year.
DETAILS
MY NOTES
Calculate the simple interest due (in dollars) on a 40-day loan of $1,600 if the annual interest rate is 9%. (Use 360 days in 1 year.)
$
DETAILS
MY NOTES
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Case Study # 4 Excel Submission – Capital Budgeting Comprehensive Problem
Pinnacle Custom Home Builders purchased a 40 foot articulating boom lift three years ago for
$50,000. The equipment has been depreciated under the 5-year MACRS schedule (20%, 32%,
19%, 12%, 12% & 5%). The old equipment can be sold for $33,000.
Pinnacle is considering the purchase of a new 60 foot articulating boom lift that would allow
the company to complete nearly all of its construction projects without the need for costly rental
lifts. The new lift could be purchased for $105,000 and would also fall under the 5-year MACRS
depreciation schedule.
Assume the old and new equipment would provide the following operating gains (or losses)
over the next six years.…
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Data
Review
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1
2 Name: KhanGhulam IIII II ||
3 Amortization Schedule
4 Instruction: Develop and amortization table for the payment of a loan on a house.
Payments are monthly for 10 years.
Loan on the house is $179,000.
5
6.
PMT formula
7
Interest is 5.3% annual.
8
PV formula
9
Payment:
10
11
Payment Payment
Number
Month
|Рayment
Amount
Beginning
Ending
Toward
Toward
12
Balance
Balance
Principal
Interest
Apr-02
May-02
13
1
179,000.00
14
15
3
16
4
17
18
19
7
20
8
21
9.
22
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25
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32
20
lili
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Pearson (Assignments) - MA
Ô https://www.mathxl.com/Student/PlayerTest.aspx?testld%3D225147196
3 103 Spring 2021
st: Test 2 (Finance) Online
nis Question: 1 pt
5 of 19 (1 complete) ▼
How much must be deposited today into the following account in order to have a $135,000 college fund in 11 years? Assume no additional deposits are made.
An account with quarterly compounding and an APR of 7.32%
Sshould be deposited today.
(Do not round until the final answer. Then round to the nearest cent as needed.)
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SSIGNMENTS
Assignment - 1. Credit Scores and Loans
Attempt 1 of 1
COURSES
SECTION 3 OF 4
QUESTION
1
4
8
You get a personal loan of $5,000 with 12% simple interest too be paid over 30 months. What is your monthly payment?
O $150.00
O $166.67
O $216.67
O $175.00
NEXT QUESTION
O ASK FOR HELP
TURN IT IN
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Incorrect
Your answer is incorrect.
Salma wants to save money to open a tutoring center. She buys an annuity with a monthly payment of $27 that pays 3.7% interest, compounded
monthly. Payments will be made at the end of each month. Find the total value of the annuity in 10 years.
Do not round any intermediate computations, and round your final answer to the nearest cent. If necessary, refer to the list of financial formulas.
圖
Answer Submitted:
00
$12345.92
Correct Answer:
$3913.49
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uiz
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K
Chapter 9 Quiz
OA. $18,200
OB. $18,800
OC. $17,500
O D. $20,300
mylab.pearson.com
Question 5 of 10
X G At year-end, Snow
0
4
kara harper 04/09/23 10:36 AM
This quiz: 10 point(s)
possible
This question: 1
point(s) possible
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Buddy Company uses the allowance method to account for uncollectible receivables. At the beginning of the year,
Allowance for Bad Debts had a credit balance of $800. During the year Buddy wrote off uncollectible receivables of
$2,100. Buddy recorded Bad Debts Expense of $2,800. Buddy's year-end balance in Allowance for Bad Debts is
$1,500. Buddy's ending balance of Accounts Receivable is $20,300. Compute the net realizable value of Accounts
Receivable at year-end.
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Accounting Assessment
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Finish Test
Section 1 of 1 Section #1 v
12
5.
7
8.
6.
10
11
7 of 45
All
2
43
Question #7
GRevisit
Choose the best option
Wages paid to own employees who have redecorated the office are
O capital expenditure.
debited to profit and loss account.
debited to premises account.,
O credited to profit and loss account.
Frev Question
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Assignment - 1. Credit Scores and Loans
Attempt 1 of 1
ASSIGNMENTS
COURSES
SECTION 3 OF 4
QUESTION 6 OF 8
1
2
4
5
>>
Match the option with the lowest monthly payment to highest monthly payment.
$12,000 loan with 1% simple
1.
lowest payment
interest over 7 years
$7,500 loan with 4% simple interest
2. second highest payment
over 5 years
$8,500 loan with 2% simple
3. third highest payment
interest over 6 years
$10,000 loan with 3% simple
4. fourth highest payment
interest over 4 years
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2/4/2021
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My Submissions
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Title Start Date Due Date Post Date Marks Available
Case study 2 - Case 2 27 Oct 2020 - 08:00 28 Oct 2020 - 06:00 28 Oct 2020 - 19:00 100
Summary:
On Chapters 9, 10, and 11:
The YuRaeKa charity was established in 1960. The charity’s aim is to provide support to children from disadvantaged backgrounds who wish to take part in sports such as tennis, badminton, squash, basketball and football.
YuRaeKa has a detailed constitution[1] which explains how the charity’s income can be spent. The constitution also notes that administration expenditure cannot exceed 10% of income in any year.
The charity’s income is derived wholly from voluntary donations. Sources of donations include:
(i) Cash collected by volunteers asking the public for donations in shopping areas,
(ii) Cheques sent to the charity’s head office,
(iii) Donations…
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Instructions
In this session, we have a 6-part comprehensive problem. Download the Session 6 Comprehensive Problem Templates below to complete the 6 required parts of the problem. You will need your Bergevin and MacQueen book for reference.
Rancho Cucamonga Inc. began business on January 1, 2020. The firm earned $100 from sales in its first year of business. Rancho Cucamonga collected $90 of revenue earned in cash during 2020 and reported a $10 account receivable on its 2020 balance sheet. The firm paid $70 cash for operating expenses in 2020 and reported a $5 account payable for unpaid operating expenses on its 2020 balance sheet. Income tax laws only recognize cash collected from sales and cash paid for expenses as taxable items in the year collected or paid.
Rancho Cucamonga also reported a $10 fine, paid in cash, to the federal government for unfair business practices. Generally accepted accounting principles allow firms…
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What is the amount of the total paid-in capital? What makes up this amount?
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akeAssignmentMain.do?invoker%3D&takeAssignmentSessionLocator=&inprogress%3false
hapter 11 Lab Application
全 回
Sign ia
еBook
You have been depositing money into an account yearly based on the following investment amounts, rates and times, what is the value of that investment account at the end of that
period?
(Click here to see present value and future value tables)
Amounts of
Value at the End
Investment
Rate
Times
of the Period
$7,000
20%
16 years
612,094.91X
$11,000
15%
9 years
184,644.26X
$15,000
12%
5 years
95,292.71 X
$36,000
10%
2 years
75,600.00
Feedback
>
Check My Work
For each scenario, use the rate and time components to use the applicable time value of money table to determine the needed factor. Multiply the investment amount by the
future value factor to determine the value of end of the period.
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What are the future value and the interest earned if $4000 is invested for 3 years at 8% compounded quarterly? (Round your answers to the nearest cent.)
future value
24
interest earned
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- Use the information above to complete the missing values in the table below $2,500 invested 4% interest.arrow_forwardabout:blank Blackboard Learn sc.edu/webapps/assessment/take/launch isp?course assessment_id=_114 Remaining Time: 1 hour, 23 minutes, 35 seconds. Question Completion Status: A Moving to the next question prevents changes to this answer. Question 1 What is the Payback Period for the following investment? Year 1 2 3 4 5 O a. 3.77 Ob. 3.73 Oc. 3.89 Od. 3.96 Cash Out $ (1,600,000) (710,000) Cash In 550,000 580,000 610,000 640,000 670,000 A Moving to the next question prevents changes to this answer. 000 900 F2 F3 F4 MacBookarrow_forward2. Use the worksheet tab Problem 2 A-FV Retirement and Problem 2 B -PV Invest K File 6 7 ñ Paste K11 16 17 18 Book1 - Excel Clipboard Home Insert Calibri X Dr- Ready B I U 89- Draw Page Layout Formulas Data Review View == 28 M =100- Font 2 Return Rate 3 Investment Duration in Years 4 Amount Invested Future Investment Value fx One-Time Investment Scena Return Rate 9Investment Duration in Years 10 Monthly Payroll Deduction 11 Company Match 12 Monthly Investment 13 Current Balance 14 Future Investment Value 15 Sheet1 11 A A A- Retirement Plan Scenario Sheet2 Accessibility: Investigate D O AI 19 9 Return Rate = 5.500% 13 7500 Alignment 4.500% 35 500 50% 750 $10,000.00 19 D O Search General - $ % 9 68 28 Number Automate Help Acrobat Conditional Formatting W Format as Table Cell Styles - Styles Goal seek Future Savings Value at $20,000 Future Savings Value at $25,000 Insert Delete Format - Cells G O dating FS Sensitivity Retirement plan Goal Seek Solution by changing Return Rate-Goal seek…arrow_forward
- Eat min C e New tab Λ Content xW Quiz 3-MAT-143, section 03F, Fa X + Q A ✩ https://www.webassign.net/web/Student/Assignment-Responses/last?dep=34832472 Viewing Saved Work Revert to Last Response DETAILS MY NOTES You deposit $850 in an account paying an annual simple interest rate of 7.8%. Find the future value of the investment (in dollars) after 1 year. DETAILS MY NOTES Calculate the simple interest due (in dollars) on a 40-day loan of $1,600 if the annual interest rate is 9%. (Use 360 days in 1 year.) $ DETAILS MY NOTESarrow_forwardPerform a categorical analysis on the majors of students enrolled in the MBA. Describe your findings.arrow_forwardNonearrow_forward
- Study Excel Instructio x EXAM 3-BUSI 320 class notes x b Login (bartieby es/155996/assignments/1958552 E Individual Differen... M Corporate Finance U SPAN101: Element... L Canvas Dashboard U Course Registration out # 4 Comp Prob - Ch 12 (D).docx I Downle Case Study # 4 Excel Submission – Capital Budgeting Comprehensive Problem Pinnacle Custom Home Builders purchased a 40 foot articulating boom lift three years ago for $50,000. The equipment has been depreciated under the 5-year MACRS schedule (20%, 32%, 19%, 12%, 12% & 5%). The old equipment can be sold for $33,000. Pinnacle is considering the purchase of a new 60 foot articulating boom lift that would allow the company to complete nearly all of its construction projects without the need for costly rental lifts. The new lift could be purchased for $105,000 and would also fall under the 5-year MACRS depreciation schedule. Assume the old and new equipment would provide the following operating gains (or losses) over the next six years.…arrow_forwardHome Insert Draw Page Layout Formulas Data Review View Tell me Arial 10 A A° Wrap Text v General A $ v % 9 Paste В U Merge & Center v 13 fx A В C E F J 1 2 Name: KhanGhulam IIII II || 3 Amortization Schedule 4 Instruction: Develop and amortization table for the payment of a loan on a house. Payments are monthly for 10 years. Loan on the house is $179,000. 5 6. PMT formula 7 Interest is 5.3% annual. 8 PV formula 9 Payment: 10 11 Payment Payment Number Month |Рayment Amount Beginning Ending Toward Toward 12 Balance Balance Principal Interest Apr-02 May-02 13 1 179,000.00 14 15 3 16 4 17 18 19 7 20 8 21 9. 22 10 23 11 24 12 25 13 26 14 27 15 28 16 29 17 30 18 31 19 32 20 liliarrow_forwardV Content Pearson (Assignments) - MA Ô https://www.mathxl.com/Student/PlayerTest.aspx?testld%3D225147196 3 103 Spring 2021 st: Test 2 (Finance) Online nis Question: 1 pt 5 of 19 (1 complete) ▼ How much must be deposited today into the following account in order to have a $135,000 college fund in 11 years? Assume no additional deposits are made. An account with quarterly compounding and an APR of 7.32% Sshould be deposited today. (Do not round until the final answer. Then round to the nearest cent as needed.)arrow_forward
- https://sfdr.owschools.com/owsoo/studentAssignment/index?eh=65534403 SSIGNMENTS Assignment - 1. Credit Scores and Loans Attempt 1 of 1 COURSES SECTION 3 OF 4 QUESTION 1 4 8 You get a personal loan of $5,000 with 12% simple interest too be paid over 30 months. What is your monthly payment? O $150.00 O $166.67 O $216.67 O $175.00 NEXT QUESTION O ASK FOR HELP TURN IT IN e to search Pause T H K B N M Alt Ctarrow_forward5:42 AM Tue Nov 16 * 100% www-awu.aleks.coma Exam 2, 7.3-9.4 REVIEW Report Overall Assignment Score: 73% (Best Score) Ninotchka V Score. O O pont Submitteu. NOV Z 7.32 1 IVI Tme Spet. S s Español Incorrect Your answer is incorrect. Salma wants to save money to open a tutoring center. She buys an annuity with a monthly payment of $27 that pays 3.7% interest, compounded monthly. Payments will be made at the end of each month. Find the total value of the annuity in 10 years. Do not round any intermediate computations, and round your final answer to the nearest cent. If necessary, refer to the list of financial formulas. 圖 Answer Submitted: 00 $12345.92 Correct Answer: $3913.49 Assignments List EVEI IVIUIawll LLC. All Rights Reserved. Terms of Use Privacy Center Accessibility IIarrow_forwardccounting | Spring 2023 uiz Course Home - kar X K Chapter 9 Quiz OA. $18,200 OB. $18,800 OC. $17,500 O D. $20,300 mylab.pearson.com Question 5 of 10 X G At year-end, Snow 0 4 kara harper 04/09/23 10:36 AM This quiz: 10 point(s) possible This question: 1 point(s) possible ? Submit quiz Buddy Company uses the allowance method to account for uncollectible receivables. At the beginning of the year, Allowance for Bad Debts had a credit balance of $800. During the year Buddy wrote off uncollectible receivables of $2,100. Buddy recorded Bad Debts Expense of $2,800. Buddy's year-end balance in Allowance for Bad Debts is $1,500. Buddy's ending balance of Accounts Receivable is $20,300. Compute the net realizable value of Accounts Receivable at year-end.arrow_forward
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