15,In the year 2000 several 1st year business students formed an investment group as part of a class assignment. The graph above show the growth of their investment portfolio over the past several years. (Note: t = 0 is the year 2000) Growth of Investment Portfolio Year (t) Value of Investments ($) 2000 40 000 2001 53 000 2002 73 245 450 2003 98 415 2 300 2004 148 860 2005 223 500 2006 330 250 2007 490 850 Time (years) a) Determine the average rate of growth of their investment between 2000 and 2005. Value (in $1000)

15,In the year 2000 several 1st year business students formed an investment group as part of a class assignment. The graph above show the growth of their investment portfolio over the past several years. (Note: t = 0 is the year 2000) Growth of Investment Portfolio Year (t) Value of Investments ($) 2000 40 000 2001 53 000 2002 73 245 450 2003 98 415 2 300 2004 148 860 2005 223 500 2006 330 250 2007 490 850 Time (years) a) Determine the average rate of growth of their investment between 2000 and 2005. Value (in $1000)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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An analyst is studying the company LEMO in order to make an investment decision. The investor's estimates of Free Cash Flows to Firm (FCF), levels of debt and net Financial Expenses (FE) of the company are presented in Table 1. Table 1 Year 2020 Year 2021 | Year 2022 | Year 2023 Year 2024 Year 2025 FCF €10000 €11300 €10950 €12500 €12750 Level of €1000 €1200 €1450 €1350 €1600 €1675 debt FE €70 €90 €100 €108 €115 Additionally, the analyst has made the following assumptions: (i) risk-free interest rate: 1.5 %; (i) target capital structure: debt/(debt + equity) ratio of 45%; (ii) equity risk premium: 6%; (iv) asset beta: 1.15; and (v) tax rate: 20%. The number of shares of the company is 1 2000 and the current market price of LEMO is €8.0 per share. Present your result rounded to one decimal place. a. Compute the yearly Equity Free Cash Flows (EFCF) for the period from 2021 until 2025. Explain your answer. b. Assume the expected nominal growth rate of the EFCF in perpetuity is 1.25%.…
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Week 5 Rachel is a financial investor who actively buys and sells in the securities market. Now she has a portfolio of all blue chips, including: $13,500 of Share A, $7,600 of Share B, $14,700 of Share C, and $5,500 of Share D. Required: a) Compute the weights of the assets in Rachel’s portfolio? (2 marks) b) If Rachel’s portfolio has provided her with returns of 9.7%, 12.4%, -5.5% and 17.2% over the past four years, respectively. Calculate the geometric average return of the portfolio for this period. (2 marks) c) Assume that expected return of the stock A in Rachel’s portfolio is 13.6% this year. The risk premium on the stocks of the same industry are 4.8%, betas of these stocks is 1.5 and the inflation rate was 2.7%. Calculate the risk-free rate of return using Capital Market Asset Pricing Model (CAPM). (2 marks) d) Following is forecast for economic situation and Rachel’s portfolio returns next year, calculate the expected return, variance and standard deviation of the portfolio.…
Collaborative Learning -KKI Chocolato Co is a supplier chocolate for Orangtua Corporation. It has had two exceptionally good years and has elected to invest its excess funds in bonds and equity. The following selected transactions relate to bonds and equity acquired as an investment by Chocolato, whose fiscal year ends on December 31. 2020 01-Feb Purchased 5,000 shares of the 100,000 shares no par common shares of Pineapple Co. for $52,500. The investment was classified as Trading 01-Apr Purchased 800, @ $1,000 Ginger Co. 10% bonds at face value plus accrued interest . Interest paid every 1st January. The investment was classified as Trading. 30-Apr Purchased 1.000 shares of the 100,000 shares outstanding $10 par ordinary shares of Mint Corporation for $6,200. The investment was classified as Trading 01-Nov Received a cash dividend of $2 per share on the Mint Corporation stock 20-Dec Pineapple Co announced to pay dividend for shareholder $1 per share, and will paid Jan 10, 2021.…
- Suppose that the cash flows of two investments are as follows: Unit: $1000 CASH FLOW AT YEAR 1 YEAR: 2 Investment A (11,500,000) 5,650,000 5,250,000 3,700,000 2,500,000 2,200,000 Investment B (11,500,000) 2,950,000 4,250,000 5,000,000 5,100,000 4,900,000 Using the investment decision rules (i.e., NPV & IRR) to select the best investment. Suppose that the hurdle rate, r is16%.
Hi, below is an attached photo of the question. Please show explanation of calculations. Thankyou.
You borrowed $10,000 from a bank to invest in IT & Mobile technology with payback the loan in graduated payment plan. If your first payment is $1,000 at the end of first year and i=10% over 5 years. Note: (P/G, 10%, 5) = 6.86 Q/Find the total earned interest by the bank at the end of period?
In 25 years, you are hoping to have saved $120 000 towards your child’s university education. If you are able to save $3000 at the end of each year for the next 25 years, what rate of return must you earn on your investments in order to achieve your goal? a. 5% b. 6% c. None of answers given d. 4%
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Amy opened an RRSP account and deposited $1,000 into it. She then deposited $600 at the end of the 1st year and $625 at the end of the 2nd year, into the account. The RRSP was earning 2.20% compounded quarterly.a. What is the accumulated value of the investments at the end of the 2nd year?rounded to two decimal placesb. What is the accumulated value of the investment at the end of 8 years? small telecommunications company invested its 2010 net income of $561,400 in a savings account for 4 years and 4 months. Money was earning interest at a rate of 7.25% compounded monthly.a. Calculate the amount it would have in this account at the end of the period.rounded to two decimal placesb. Calculate the interest earned.rounded to two decimal places

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