Questions from General Investment

Q: Deployment Specialists pays a current (annual) dividend of $1

Deployment Specialists pays a current (annual) dividend of $1 and is expected to grow at 20% for two years and then at 4% thereafter. If the required return for Deployment Specialists is 8.5%, what is...

Q: Jand, Inc., currently pays a dividend of $1.

Jand, Inc., currently pays a dividend of $1.22, which is expected to grow indefinitely at 5%. If the current value of Jand ’s shares based on the constant-growth dividend discount model is $32.03, wh...

Q: How can a perpetuity, which has an infinite maturity, have

How can a perpetuity, which has an infinite maturity, have a duration as short as 10 or years?

Q: You predict that interest rates are about to fall. Which bond

You predict that interest rates are about to fall. Which bond will give you the highest capital gain? a. Low coupon, long maturity b. High coupon, short maturity c. High coupon, long maturity d. Z...

Q: The historical yield spread between AAA bonds and Treasury bonds widened dramatically

The historical yield spread between AAA bonds and Treasury bonds widened dramatically during the financial crisis a. If you believed the spread would soon return to more typical historical levels, wh...

Q: A bond currently sells for $1,050, which gives

A bond currently sells for $1,050, which gives it a yield to maturity of 6%. Suppose that if the yield increases by 25 basis points, the price of the bond falls to $1,025. What is the modified duratio...

Q: Macaulay’s duration is less than modified duration except for: a

Macaulay’s duration is less than modified duration except for: a. Zero-coupon bonds. b. Premium bonds. c. Bonds selling at par value. d. None of the above.

Q: Suppose that you just purchased 100 shares of Talk&Tell stock

Suppose that you just purchased 100 shares of Talk&Tell stock for $40 per share. a. Ifthe initial margin requirement is 60%, how much money must you borrow? Amount borrowed b. Construct the ba...

Q: Suppose that you just purchased 100 shares of Beta Banana’s stock for

Suppose that you just purchased 100 shares of Beta Banana’s stock for $40 per share. The initial margin requirement is 60%, which means the amount borrowed is $1,600. The correspondi...

Q: Suppose that you just short sold 100 shares of Quiet Minds stock

Suppose that you just short sold 100 shares of Quiet Minds stock for $73 per share. a. If the initial margin requirement is 55%, how much equity must you invest? (Round your answer to the nearest do...