An individual has $200,000 to invest. They are trying to maximize their return, but have given their investor advisor instruction on how to invest the money. The investment advisor has given them four different alternatives to invest in they are listed in the table below along with their rates of return that is estimated. Investment-Type Hydro - Stock USA- Treasury Bills The mobile phone Co.-Bonds Texas Oil Co. - Stock Rate of Return 12% 1.25% 3.35% 1.75% The individual has the following parameters. 1. That no more than 50% can be invested in bonds. 2. That at least 25% is invested in treasury bills. 3. That at least 15% be invested in Texas Oil Co. 4. That all of the $200,000 is to be invested. Find the optimal investment mix and what is the project return in the next year?

An individual has $200,000 to invest. They are trying to maximize their return, but have given their investor advisor instruction on how to invest the money. The investment advisor has given them four different alternatives to invest in they are listed in the table below along with their rates of return that is estimated. Investment-Type Hydro - Stock USA- Treasury Bills The mobile phone Co.-Bonds Texas Oil Co. - Stock Rate of Return 12% 1.25% 3.35% 1.75% The individual has the following parameters. 1. That no more than 50% can be invested in bonds. 2. That at least 25% is invested in treasury bills. 3. That at least 15% be invested in Texas Oil Co. 4. That all of the $200,000 is to be invested. Find the optimal investment mix and what is the project return in the next year?

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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Finance suppose you work for apple, inc. an American multinational technology company headquartered in Cupertino, California, as a financial analyst. You are provided with informaiton about three different investment oppotunities (Projects A, B, and C) that division managers believe are value-enhancing for the firm. The cash flows for each project are given below. As each project has the same risk, you may assume they all have a discount rate of 7.00% Determine The interenal rate of return of Project "C"
You are an angel investor, and 4 entrepreneurs have approached you to build some innovative folding tables, and the proposals are as follows. Project A, an investment of 566967 and annual cash flows respectively of 415527, 209635, 199906 and 298311. Project B, an investment of 439043 and annual cash flows respectively of 417004, 150449, 117975 and 384645. Project C, an investment of 628001 and annual cash flows respectively of 140108, 507720, 225467 and 147962. Project D, an investment of 450834 and annual cash flows respectively of 102735, 111878, 508753 and 154070. If the rate expected by you is 21.33% per year of compound interest. Which project is more profitable according to the NPV (Net Present Value)?Question 1 options: d c a b
Assume you are a junior member of the IPC (Investment Policy Committee) of a money management firm that manages a large pension fund. 10% of the investments, approximately $100,000,000 are invested in companies that are foreign and operate exclusively in the Eurozone (Those countries that operate as members of the European Union and use the euro as the single currency). The IPC is concerned about the recent instability of the Euro and asks you to work up some recommendations on how to hedge that portion of the portfolio that is exposed to currency and interest rate risks, as well as any other risks you may perceive.
The book I use for study: Principles of Managerial Finance [Global Edition] 16th Edition. Chad J. Zutter & Scott B. Smart Questions in image
Please answer all 4 parts with explanations thx
Which of the following is a section of a cash flow statement? Select one: a.Fixed costs outflows b.Cash basis accounting systems c.Wage taxes d.EIN Question 22 Question text If you invest $1,525,000 in a business and earn a return of $775,000, what is your ROI? Select one: a.42% b.45% c.51% d.1.96% Question 23 Question text If Jacques invests $20,000 at 10% interest for 3 years, what will the future value of the money be? Select one: a.$26,620.00 b.$6620.00 c.$20,606.02 d.$26,000.00 Question 24 Question text Two common risks to cash flow stability are ________ and ________. Select one: a.credit squeeze; burn rate b.surplus inventory; pilferage c.burn rate; pilferage d.surplus inventory; credit squeeze Question 25 Question text A suggested allowance for contingencies and emergencies at start-up is _____ of estimated start-up costs. Select one: a.5 percent b.10 percent c.25 percent d.40 percent
1. What financial market might a project sponsor go to, to secure funding for a new basketball stadium in Los Angeles that could cost up to $3 billion dollars or more? a. money markets- The segments of the financial markets where the instruments that are traded have original maturities equal to one year or less.b. capital markets- The segments of the financial markets where the instruments that are traded have maturities greater than one year.debtmarkets Financialmarkets where loans are traded.c. equity markets- Financial markets where corporate stocks are traded.d. primary markets- Markets in which various organizations raise funds by issuing new securities.e.secondary markets- Markets where financial assets that have previously been issued by various organizations are traded among investors.f. derivatives markets- Financial markets where options and futures are traded.
2
Formulate a system of equations for the situation below and solve. A private investment club has $600,000 earmarked for investment in stocks. To arrive at an acceptable overall level of risk, the stocks that management is considering have been classified into three categories: high-risk, medium-risk, and low-risk. Management estimates that high-risk stocks will have a rate of return of 15% / year; medium-risk stocks, 10%/year; and low-risk stocks, 7%/year. The members have decided that the investment in low-risk stocks should be equal to the sum of the investments in the stocks of the other two categories. Determine how much the club should invest in each type of stock if the investment goal is to have a return of $60,000/year on the total investment. (Assume that all the money available for investment is invested.) high-risk stocks $ 24000 X medium-risk stocks low-risk stocks LA LA

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