Use the following information for questions 34 through 39. A$100 million portfolio consists of 35 million of stock 'with a betaof 1 and 65 million of bonds at a modified duration of 8. As aportfolio manager, you'd like to change the allocation to 50million of stock and 50 million of bonds. In addition, you'd liketo adjust the beta to 1.2 and the modified duration to 7.25. Astock index futures contract has a price of $225,000 and wecan assume the beta is 1. A bond futures contract is priced at$92,000 with an implied modified duration of 5.9. If you want tosynthetically sell 15 million of bonds, how many futurescontracts should you transact?Select one:O a. Buy 173 contractsO b. Sell 123 contractsc.Sell 173 contractsO d. Buy 123 contracts

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Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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You have a used CD store. At an estate sale, you can purchase 260 compact discs for $400. You believe you could sell the CDs for an average of $2.50 each. What is the net benefit of buying the CDs at the estate sale and selling them in your store? A. $400 B. $250 C. $650 D. $1050 E. $900
the price of a stock on July 1 is $30. A trader buys 100 call options on the stock with a strike price of $34 when the option price is $2. The options are exercised when the stock price is $40. The trader's net profit is ?
Lucy is working with a lender to obtain a home loan. The lender gives Lucy a quote of 4.5% with a monthly payment of $1,256. Lucy would like to decrease the monthly payment. How can Lucy go about reducing her monthly home loan. payment? O Lucy can purchase discount points upfront to reduce the interest rate on the loan. O Lucy can negotiate for a higher interest rate. O Lucy can purchase discount points upfront to increase the interest rate on the loan. O Lucy can pay a loan origination fee after the loan closes.
Money taken out of a sole proprietorship by an owner is: Choose the correct answer 1. subject to income tax, Employment Insurance and Canada Pension Plan 2. deductions when taken out. 3. considered an expense 4. taken as a draw against anticipated profits 5. all of the above
Portfolio Management If x dollars are invested in a company that controls, say, 30% of the market with five brand-names, then 0.30x is a measure of market exposure and 5x is a measure of brand-name exposure. Now suppose you are a broker at a large securities firm, and one of your clients would like to invest up to $500,000 in recording industry stocks. You decide to recommend a combination of stocks in four of the world's largest recording companies: Warner Music, Universal Music, Sony, and EMI. (See the table.)+ Market Share Number of Labels (Brands) Warner Music 12% 8 Universal Music 20% 20 Sony EMI 20% 10 15% 15 You would like your client to maximize his total market exposure but limit his brand-name exposure to 7.5 million or less (representing an average of 15 labels or fewer per company), and still invest at least 20% of the total in Universal because you feel that its control of the DGG and Phillips labels is advantageous for its classical music operations. How much should you…
If all the individual land parcels in a new housing development are sold for $300,000 each, the developer projects total revenue from land sales will be $120 million. If the land lender requires that their $60 million land loan be completely paid off by the time that 75% of the individual land parcels have been sold, what would be the lender’s minimum release price for each parcel? a. $150,000 b. $200,000 c. $250,000 d.$300,000
John Johnson, one of your classmates, is preepairing to launch an e-commerce company to sell home repair guidebooks, tools and other related material for home repairs. He has just told you that he talked to his grandmother over the weekend and she has greed to lendd her 25000 thousand euros to launch the company. When you askedJohn what arrangements he has made with his grandmother to formalize the loan, he looked puzzled and said "She plans to send me a check in a week or so, she just needs to get them out of her savings account". Do you agree/disagree with John's actions? What would you advise him to do?
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Taylor, 21, works as an assistant/receptionist at a local pet groomer, earning $15,080 per year (full-time, minimum wage work) with no benefits or paid leave. They find working with the groomers, pets, and customers interesting and fun since they plan to pursue work at the county animal shelter in the future. Working with animals has been Taylor's goal for most of their life. Taylor lives with their parents, paying rent, cooking most of the family's meals, and helping out around the house. They also provide occasional childcare for their much-younger siblings in exchange for using one of the family cars to get to work when the weather is poor. On Saturdays, Taylor volunteers with a local animal rescue. They'd like to foster pets for the rescue, but Taylor's siblings are allergic to cats and and their parents hate dogs. Taylor doesn't have a lot of spare time to socialize with their friends but always makes time for a weekly group movie night at someone else's house (Taylor's parents…
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