Slides Fundamentals of Investments - Chapter 6 ppt

... ratio = 21 .6 × ($1.97×1.153) = $49. 06 * Late-2000 stock price = $89.88 © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw Hill / Irwin 6 - 28 An Analysis of the McGraw-Hill Company Quick ... price of the stock should be $243. 86. © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw Hill / Irwin 6 - 27 An Analysis of the McGraw-Hill...

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... average, for bearing risk. © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw Hill / Irwin 1 - 26 Work the Web  For an easy-to-read review of basic statistics, see: http://www.robertniles.com/stats/ © ... dollar return = 48% of $1,000 = $480  At the end of the year, the value of your $1,000 investment is $1,480. The Historical Record: A Closer Look 1 -...

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... strike price of $90 expiring in three months at $500 ($5 per share)?  Three months later, Case 2: $90 $0 0% -$ 500 -1 00% Case 3: $80 -$ 1,000 -1 1.11% -$ 500 -1 00% © 2002 by The McGraw-Hill Companies, ... rights reserved. McGraw Hill / Irwin 14 - 16 Option Profits © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw Hill / Irwin 14 - 30 Chapt...

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... McGraw-Hill Companies, Inc. All rights reserved. McGraw Hill / Irwin 15 - 11 The Black-Scholes-Merton Option Pricing Model  The Black-Scholes-Merton option pricing model states the value of a ... Hill / Irwin 15 - 13 The Black-Scholes-Merton Option Pricing Model © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw Hill / Irwin 15 - 21 Measuring the Impact of...

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... with a beta of .75 is a. 6 percent b. 8 percent c. 11 percent d. 13 percent 16 Chapter 6 V(0)  $0.47(1.012) . 16 .012 1  1.012 1. 16 5  1.012 1. 16 5 $0.47(1.12) . 16 .12  $1.59  $6. 65  $8.24 V(0) ... V(4) = $1.00(1.08)/(. 16 .08) = $13.50 V(0) = $2.25/1. 16 + $4.00/1. 16 2 + $3.00/1. 16 3 + $14.50/1. 16 4 = $14.84 38 Chapter 6 This chapter introduced you to...

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... $138,290 $21, 566 Other income 3, 868 3, 868 Net interest expense (10,518) (10,518) Pretax income $131 ,64 0 $14,9 16 Income tax 2 (53,972) (6, 1 16) Net income $77 ,66 8 $8,800 Dividends 19, 066 19, 066 Retained ... equity 5 57, 264 49, 764 Total liabilities and equity $107, 264 $99, 764 1. Prior-year cash of $2,000 plus $6, 964 net cash flow from the pro forma cash flow statement...

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... is discounted over a full calendar year of 365 days using a bank discount yield of 5 percent and an assumed 360 -day business year, the resulting price of $949,305. 56 is calculated as follows: Example ... structure, it is often the case that the term structure turns down at very long maturities. According to the expectations hypothesis, market participants 16 Chapter 9 5 .60 % ...

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... 4 5 AA AA- A+ High credit quality, investment-grade bonds. A2 A3 Baa1 6 7 8 A A- BBB+ Upper-medium quality, investment-grade bonds. Baa2 Baa3 9 10 BBB BBB- Lower-medium quality, ... million of senior notes paying 8. 26 percent interest and $66 million of subordinated notes paying 9. 36 percent interest. The senior notes have a first claim on the aircraft in the event...

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... mortgage balance of $100,000, is calculated as: $100,000 × .08/12 = $66 6 .67 After this payment of interest, the remainder of the first monthly payment, that is, $733. 76 - $66 6 .67 = $67 .09, is used ... example, a 30-year $100,000 mortgage financed at 8 percent requires 360 monthly payments of $733. 76. The first monthly payment consists of a $66 6 .67 payment of interes...

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... number of U.S. Treasury note futures contracts needed to hedge a bond portfolio? 16. 5d What is the cheapest-to-deliver option? 16. 6 Summary and Conclusions This chapter surveyed the basics of futures ... Analyze the impact of a swing in coffee prices of 10 cents per pound in either direction if you have a 10-contract position, where each contract calls for delivery of 37,500 p...

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