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##### Just after their 15th monthly payment, Family A ha...

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Just after their 15th monthly payment, Family A had a balance of $80,000 on a 30-year 10% APR mortgage and Family B had a balance of $80,000 on a 15-year 10% APR mortgage. Whose principal payment was higher in the 16th payment? a. Family A b. Family B c. Both made the same amount of principal payment d. Not enough information to determine -------------------------------- Answer the following questions with this information Historical stock prices of Potty Corp. were given in the following table. No dividends were paid in 2012. Time Stock price January, 2012 $100 February, 2012 $80 March, 2012 $75 April, 2012 $120 May, 2012 $100 You purchased a total of $6,000 of Potty stocks by dollar cost averaging ($1,200 each month) from January to May. What was the value of your investment at the end of May? a. $6,500 b. $5,000 c. $7,000 d. $6,000 It is now May 1st. What is the maximum you be willing to pay for the Potty stock if you are expecting the price to be $150/share in December 30, when you also expect to receive a dividend of $1.20/share? (assuming a 10% MARR compounded monthly)? a. $138 b. $144 c. $141 d. $135 If you purchased $6,000 worth of Potty stocks in January and sold them all in April, what was your monthly rate of return? a. 4.66% b. 20% c. 72.8% d. 5.06% In March, what was the payoff of 1 long call option (100 shares) with an $80/share strike price and a $4/share premium? a. $400 b. ?$7,500 c. $500 d. ?$400 In May, what was the payoff of 2 short put options with a $105/share strike price and a $3/share premium? a. $1,000 b. ?$400 c. $21,000 d. $15,000 ----------------------------------------- Answer the following with the following information, A Target bond has a $1,000 par value, a 3% semiannual coupon rate, 5 full years remaining to maturity, and semiannual interest payments. Currently your money is invested in a portfolio that generates return at the rate of 10% per year, compounded semiannually. What maximum current market price of the bond are you willing to pay? a. $845.57 b. $913.41 c. $1,000.00 d. $875.38 If you purchased the bond today for $980. What is the nominal annual Yield to Maturity? a. 4.98% b. 5.26% c. 6.00% d. 6.47% If you purchased the bond today for $980, what is the NOMINAL annual current yield? a. 3.61% b. 6.12% c. 5.22% d. 6.00%

Paper#5210 | Written in 18-Jul-2015

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