# Finance bonds/dividends/loans exercises, need help or formulas Some of the exercises, calculating the Ri is clear, but then i got stuck: A security pays a yearly dividend of 7€ during 5 years, and on the 5th year we could sell it at a price of 75€, market rate is 19%, risk free rate 2%, beta 1,8. What would be its price today? 2.1 And if its dividend growths 1,7% each year along these 5 years-what would be its price? A security pays a constant dividend of 0,90€ during 5 years and thereafter will be sold at 10 €, market rate 18%, risk free rate 2,5%, beta 1,55, what would be its price today? At what price have i purchased a security if i already made a 5€ profit, and this security pays dividends as follows: first year 1,50 €, second year 2,25€, third year 3,10€ and on the 3d year i will

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Ratios, rates, proportions
Finance bonds/dividends/loans exercises, need help or formulas
Some of the exercises, calculating the Ri is clear, but then i got stuck:
A security pays a yearly dividend of 7€ during 5 years, and on the 5th year we could sell it at a price of 75€, market rate is 19%, risk free rate 2%, beta 1,8. What would be its price today? 2.1 And if its dividend growths 1,7% each year along these 5 years-what would be its price?
A security pays a constant dividend of 0,90€ during 5 years and thereafter will be sold at 10 €, market rate 18%, risk free rate 2,5%, beta 1,55, what would be its price today?
At what price have i purchased a security if i already made a 5€ profit, and this security pays dividends as follows: first year 1,50 €, second year 2,25€, third year 3,10€ and on the 3d year i will sell it for 18€. Market rate is 8%, risk free rate 0,90%, beta=2,3.
What is the original maturity (in months) for a ZCB, face value 2500€, required rate of return 16% EAR if we paid 700€ and we bought it 6 month after the issuance, and actually we made an instant profit of 58,97€
You'll need 10 Vespas for your Parcel Delivery Business. Each Vespa has a price of 2850€ fully equipped. Your bank is going to fund this operation with a 5 year loan, 12% nominal rate at the beginning, and after increasing 1% every year. You'll have 5 years to fully amortize this loan. You want tot make monthly installments. At what price should you sell it after 3 1/2 years to lose only 10% of the remaining debt.

2020-11-13
11) Total debt =€2850 x 10=€28500. I can amortize this amount in 5 years that means I make annual repayment of debt of €5700(Excluded interest element). My monthly payment shall be €475.(ex-interest). Now, we compute interest for 5 years on reducing balance of debt amount.
Year1:€28500x12%=€3420
Year2:€22800x13%=€2223
Year3:€17100x14%=€1596
Year4:€11400x15%=€855
Year5:€5700x16%=€912.
Till the term of 3.5years we paid €24000(including half year interest of €427,rounding off) Outstanding liability cum-interest comes to €9890(€2850+427+5700+912).
If I sell the Vespas to book a loss of 10% on my debt my selling price shall be, €8900(let 100% selling price be €9890 thus at 90% it comes to €8900)
[Assumption : it is assumed that interest amount accrues annully and can be spread over the months in a year.]
6) There can be 2 approach to this question: 1st by using the formula a)Dividend price approach b) Capital asset pricing model.
2nd by using the cost of equity which you derive using capital asset pricing model (CAPM) to discount the selling price at present rate.
I will solve this by the 1st approach.
Dividend price approach : Formula being ke=D1/P0+G, where D1 is annual dividend, P0 is current market value of equity (ex-dividend) and G is for Growth rate of dividend.
Capital asset pricing model (CAPM) : Formula : Rf+b(Rm-Rf)
Where Rf is risk free returns, b is the beta coefficient, Rm is market risk.
Let's find the cost of equity using CAPM method which comes to 0.1723 by using above state formula.
Now we replace Ke in dividend price approach to 0.1723 which gets us current market value of securities I.e €8.67 Working is as follows, As the dividend grows by 50% and 38% in year 2 and 3 respectively, we can average it to 44% Using the formula we get current market price as 13.67 reduce the profit you made and that shall be the cost you paid for the securities.
[Note that this approach ignores future market value of securities.]
Use the same formula in question 2 and 5 by making appropriate assumption and you will find your answers. Only thing to care about in question 2 is that in the 1st part you won't consider dividend growth rate, only in 2nd part it is required to be considered.

### Relevant Questions

The bulk density of soil is defined as the mass of dry solidsper unit bulk volume. A high bulk density implies a compact soilwith few pores. Bulk density is an important factor in influencing root development, seedling emergence, and aeration. Let X denotethe bulk density of Pima clay loam. Studies show that X is normally distributed with $$\displaystyle\mu={1.5}$$ and $$\displaystyle\sigma={0.2}\frac{{g}}{{c}}{m}^{{3}}$$.
(a) What is thedensity for X? Sketch a graph of the density function. Indicate onthis graph the probability that X lies between 1.1 and 1.9. Findthis probability.
(b) Find the probability that arandomly selected sample of Pima clay loam will have bulk densityless than $$\displaystyle{0.9}\frac{{g}}{{c}}{m}^{{3}}$$.
(c) Would you be surprised if a randomly selected sample of this type of soil has a bulkdensity in excess of $$\displaystyle{2.0}\frac{{g}}{{c}}{m}^{{3}}$$? Explain, based on theprobability of this occurring.
(d) What point has the property that only 10% of the soil samples have bulk density this high orhigher?
(e) What is the moment generating function for X?

A random sample of $$n_1 = 14$$ winter days in Denver gave a sample mean pollution index $$x_1 = 43$$.
Previous studies show that $$\sigma_1 = 19$$.
For Englewood (a suburb of Denver), a random sample of $$n_2 = 12$$ winter days gave a sample mean pollution index of $$x_2 = 37$$.
Previous studies show that $$\sigma_2 = 13$$.
Assume the pollution index is normally distributed in both Englewood and Denver.
(a) State the null and alternate hypotheses.
$$H_0:\mu_1=\mu_2.\mu_1>\mu_2$$
$$H_0:\mu_1<\mu_2.\mu_1=\mu_2$$
$$H_0:\mu_1=\mu_2.\mu_1<\mu_2$$
$$H_0:\mu_1=\mu_2.\mu_1\neq\mu_2$$
(b) What sampling distribution will you use? What assumptions are you making? NKS The Student's t. We assume that both population distributions are approximately normal with known standard deviations.
The standard normal. We assume that both population distributions are approximately normal with unknown standard deviations.
The standard normal. We assume that both population distributions are approximately normal with known standard deviations.
The Student's t. We assume that both population distributions are approximately normal with unknown standard deviations.
(c) What is the value of the sample test statistic? Compute the corresponding z or t value as appropriate.
(Test the difference $$\mu_1 - \mu_2$$. Round your answer to two decimal places.) NKS (d) Find (or estimate) the P-value. (Round your answer to four decimal places.)
(e) Based on your answers in parts (i)−(iii), will you reject or fail to reject the null hypothesis? Are the data statistically significant at level \alpha?
At the $$\alpha = 0.01$$ level, we fail to reject the null hypothesis and conclude the data are not statistically significant.
At the $$\alpha = 0.01$$ level, we reject the null hypothesis and conclude the data are statistically significant.
At the $$\alpha = 0.01$$ level, we fail to reject the null hypothesis and conclude the data are statistically significant.
At the $$\alpha = 0.01$$ level, we reject the null hypothesis and conclude the data are not statistically significant.
(f) Interpret your conclusion in the context of the application.
Reject the null hypothesis, there is insufficient evidence that there is a difference in mean pollution index for Englewood and Denver.
Reject the null hypothesis, there is sufficient evidence that there is a difference in mean pollution index for Englewood and Denver.
Fail to reject the null hypothesis, there is insufficient evidence that there is a difference in mean pollution index for Englewood and Denver.
Fail to reject the null hypothesis, there is sufficient evidence that there is a difference in mean pollution index for Englewood and Denver. (g) Find a 99% confidence interval for
$$\mu_1 - \mu_2$$.
lower limit
upper limit
(h) Explain the meaning of the confidence interval in the context of the problem.
Because the interval contains only positive numbers, this indicates that at the 99% confidence level, the mean population pollution index for Englewood is greater than that of Denver.
Because the interval contains both positive and negative numbers, this indicates that at the 99% confidence level, we can not say that the mean population pollution index for Englewood is different than that of Denver.
Because the interval contains both positive and negative numbers, this indicates that at the 99% confidence level, the mean population pollution index for Englewood is greater than that of Denver.
Because the interval contains only negative numbers, this indicates that at the 99% confidence level, the mean population pollution index for Englewood is less than that of Denver.
We will now add support for register-memory ALU operations to the classic five-stage RISC pipeline. To offset this increase in complexity, all memory addressing will be restricted to register indirect (i.e., all addresses are simply a value held in a register; no offset or displacement may be added to the register value). For example, the register-memory instruction add x4, x5, (x1) means add the contents of register x5 to the contents of the memory location with address equal to the value in register x1 and put the sum in register x4. Register-register ALU operations are unchanged. The following items apply to the integer RISC pipeline:
a. List a rearranged order of the five traditional stages of the RISC pipeline that will support register-memory operations implemented exclusively by register indirect addressing.
b. Describe what new forwarding paths are needed for the rearranged pipeline by stating the source, destination, and information transferred on each needed new path.
c. For the reordered stages of the RISC pipeline, what new data hazards are created by this addressing mode? Give an instruction sequence illustrating each new hazard.
d. List all of the ways that the RISC pipeline with register-memory ALU operations can have a different instruction count for a given program than the original RISC pipeline. Give a pair of specific instruction sequences, one for the original pipeline and one for the rearranged pipeline, to illustrate each way.
Hint for (d): Give a pair of instruction sequences where the RISC pipeline has “more” instructions than the reg-mem architecture. Also give a pair of instruction sequences where the RISC pipeline has “fewer” instructions than the reg-mem architecture.
A 75.0-kg man steps off a platform 3.10 m above the ground. Hekeeps his legs straight as he falls, but at the moment his feettouch the ground his knees begin to bend, and, treated as aparticle, he moves an additional 0.60 m before coming torest.
a) what is the speed at the instant his feet touch theground?
b) treating him as a particle, what is his acceleration(magnitude and direction) as he slows down, if the acceleration isassumed to be constant?
c) draw his free-body diagram (see section 4.6). in termsof forces on the diagram, what is the net force on him? usenewton's laws and the results of part (b) to calculate the averageforce his feet exert on the ground while he slows down. expressthis force in newtons and also as a multiple of his weight.
The student engineer of a campus radio station wishes to verify the effectivencess of the lightning rod on the antenna mast. The unknown resistance $$\displaystyle{R}_{{x}}$$ is between points C and E. Point E is a "true ground", but is inaccessible for direct measurement because the stratum in which it is located is several meters below Earth's surface. Two identical rods are driven into the ground at A and B, introducing an unknown resistance $$\displaystyle{R}_{{y}}$$. The procedure for finding the unknown resistance $$\displaystyle{R}_{{x}}$$ is as follows. Measure resistance $$\displaystyle{R}_{{1}}$$ between points A and B. Then connect A and B with a heavy conducting wire and measure resistance $$\displaystyle{R}_{{2}}$$ between points A and C.Derive a formula for $$\displaystyle{R}_{{x}}$$ in terms of the observable resistances $$\displaystyle{R}_{{1}}$$ and $$\displaystyle{R}_{{2}}$$. A satisfactory ground resistance would be $$\displaystyle{R}_{{x}}{<}{2.0}$$ Ohms. Is the grounding of the station adequate if measurments give $$\displaystyle{R}_{{1}}={13}{O}{h}{m}{s}$$ and R_2=6.0 Ohms?
The table below shows the number of people for three different race groups who were shot by police that were either armed or unarmed. These values are very close to the exact numbers. They have been changed slightly for each student to get a unique problem.
Suspect was Armed:
Black - 543
White - 1176
Hispanic - 378
Total - 2097
Suspect was unarmed:
Black - 60
White - 67
Hispanic - 38
Total - 165
Total:
Black - 603
White - 1243
Hispanic - 416
Total - 2262
Give your answer as a decimal to at least three decimal places.
a) What percent are Black?
b) What percent are Unarmed?
c) In order for two variables to be Independent of each other, the P $$(A and B) = P(A) \cdot P(B) P(A and B) = P(A) \cdot P(B).$$
This just means that the percentage of times that both things happen equals the individual percentages multiplied together (Only if they are Independent of each other).
Therefore, if a person's race is independent of whether they were killed being unarmed then the percentage of black people that are killed while being unarmed should equal the percentage of blacks times the percentage of Unarmed. Let's check this. Multiply your answer to part a (percentage of blacks) by your answer to part b (percentage of unarmed).
Remember, the previous answer is only correct if the variables are Independent.
d) Now let's get the real percent that are Black and Unarmed by using the table?
If answer c is "significantly different" than answer d, then that means that there could be a different percentage of unarmed people being shot based on race. We will check this out later in the course.
Let's compare the percentage of unarmed shot for each race.
e) What percent are White and Unarmed?
f) What percent are Hispanic and Unarmed?
If you compare answers d, e and f it shows the highest percentage of unarmed people being shot is most likely white.
Why is that?
This is because there are more white people in the United States than any other race and therefore there are likely to be more white people in the table. Since there are more white people in the table, there most likely would be more white and unarmed people shot by police than any other race. This pulls the percentage of white and unarmed up. In addition, there most likely would be more white and armed shot by police. All the percentages for white people would be higher, because there are more white people. For example, the table contains very few Hispanic people, and the percentage of people in the table that were Hispanic and unarmed is the lowest percentage.
Think of it this way. If you went to a college that was 90% female and 10% male, then females would most likely have the highest percentage of A grades. They would also most likely have the highest percentage of B, C, D and F grades
The correct way to compare is "conditional probability". Conditional probability is getting the probability of something happening, given we are dealing with just the people in a particular group.
g) What percent of blacks shot and killed by police were unarmed?
h) What percent of whites shot and killed by police were unarmed?
i) What percent of Hispanics shot and killed by police were unarmed?
You can see by the answers to part g and h, that the percentage of blacks that were unarmed and killed by police is approximately twice that of whites that were unarmed and killed by police.
j) Why do you believe this is happening?
Do a search on the internet for reasons why blacks are more likely to be killed by police. Read a few articles on the topic. Write your response using the articles as references. Give the websites used in your response. Your answer should be several sentences long with at least one website listed. This part of this problem will be graded after the due date.
You want to invest money for your child's education in a certificate of deposit (CD). You want it to be worth $$12,000$$ in 10 years. How much should you invest if the CD pays interest at a $$9\%$$ annual rate compounded