fin535 final exam
1. (TCO 2) Semitool Corp has an anticipated extra return of 6% for subsequent yr. Nevertheless, for each sudden 1% change available in the market, Semitool's return responds by an element of 1.four. Suppose it seems that the economic system and the inventory market do higher than anticipated by 2% and Semitool's merchandise expertise extra fast development than anticipated, thus pushing up the inventory value by one other 1%. Primarily based on this info, what was Semitool's precise extra return? (Factors : 10)2. (TCO 2) What's the anticipated return of the three-issue portfolio with the next traits?Difficulty Anticipated Return Customary Deviation WeightA 15% 22 .4B 10% eight .3C 6% three .three(Factors : 10)three. (TCO 5) The nominal rate of interest is 6% and the inflation charge is three%. What's the actual actual rate of interest?(Factors : 10)four. (TCO 5) Calculate the suitable promoting value of a 30-year 9% annual coupon paid semiannually, $1,000 company bond that was bought 5 years in the past. Market rates of interest are averaging eight%. (Factors : 10)5. (TCO 6) What's the rate of interest wanted on a $1,000 face worth 5% coupon company bond with the intention to make it equal when it comes to return to 1 whose rate of interest is tax free? Assume the company tax charge is 30%. (Factors : 10)6. (TCO eight) Utilizing the safety market line system reasonably than the dividend low cost system, decide the anticipated return on a agency's widespread inventory when(a) beta = 1.2;(b) the risk-free charge is eight%; and(c) market rates of interest have hovered round 13%.(Factors : 10)7. (TCO 6) To procure a $1,000 bond at a YTM of 6%. It has an eight% coupon that's paid semiannually and a 20-year maturity. The commerce settled two days in the past and the newest coupon fee occurred 32 days in the past. What was the bill value that you simply have been required to pay? (Factors : 10)eight. (TCO 2) Discover the anticipated return and variance of a two-asset portfolio, 65% bonds and 35% shares. The anticipated return is 6% for bonds and 10% for shares. The variances are 12% for bonds and 25% for inventory. Assume that the correlation coefficient between bonds and inventory = zero.(Factors : 10)