Big Bank charges 5% compounded semi-annually and Little Bank charges 5.0% compounded quarterly on its’ loans. Which bank would you prefer to borrow from? Select one: a. Big bank b. impossible to decide. c. Neither d. Little bank
Big Bank charges 5% compounded semi-annually and Little Bank charges 5.0% compounded quarterly on its’ loans. Which bank would you prefer to borrow from? Select one: a. Big bank b. impossible to decide. c. Neither d. Little bank
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
Related questions
Question
Big Bank charges 5% compounded semi-annually and Little Bank charges 5.0% compounded quarterly on its’ loans. Which bank would you prefer to borrow from?
Select one:
a. Big bank
b. impossible to decide.
c. Neither
d. Little bank
The risk-free rate is 2% and the expected return on a market portfolio is 6%. If a share has a beta of 1.3, what is its expected return of a share?
Select one:
a. 6.7%
b. 7.85%
c. 7.2%
d. 7.9%
Which of the following is not an advantage of accounting standards?
Select one:
a. It reduces the reliability of financial statements.
b. It provides guidance on the content and presentation of financial statements.
c. It helps to attain uniformity in accounting.
d. All of the given answers are correct.
Diversification is good:
Select one:
a. To minimise the risk of your portfolio
b. To increase the net financial cash flows of your portfolio.
c. None of the given answers is correct.
d. To minimise possible returns.
What would you recommend if the benefit / cost ratio is >1:
Select one:
a. The project must be rejected.
b. Benefit / cost ratio always =1
c. Benefit / cost ratio cannot be >1
d. The project must be accepted.
Expert Solution
Step 1
Big Bank charges = 5%
Big Bank Compounding = semi annual
Little Bank charges = 5.0%
Little Bank Compounding = quarterly
Step by step
Solved in 2 steps
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education