Considering discount rate of 8%, calculate NPV,Benefit Cost Ratio, and Present Value Ratio for the following investment and explain if it is a good investment. C: Cost, I:Income, L: Salvage value \text { ó, calculate NPV, } Value Ratio for the n if it is a good

The current price of the Exchange Traded Fund YHT, which does not pay dividends, is $11.75 per share. Your position, worth 9400 dollars,consists entirely of YHT shares. The effective 3-month interest rate is 0.75% and futures contracts on YHT with 3-month maturity are trading at fair value. To protect your position against potential losses, you decide to partially hedge by selling 720 YHT futures that expire in 3 months. You have built a proprietary model according to which the 3-month net return on YHT will be between -22% and 23%. What is the lowest possible value of your combined position in 3 months based on your model?

1. Select three different corporate bonds from three different companies. The bonds must have years to maturity at least 5 years apart from each other. One of the bonds should be issued by the company evaluated by your group in the first written assignment. a. A good bond data resource is: http://finra-markets.morningstar.com/ 2. Calculate the duration of each bond and the duration of a bond portfolio investing equally in the three bonds. 3. For reference purposes, select an additional two bonds issued by the companies from step 1 that match the longest maturity bond in your portfolio (i.e., you will analyze 5 bonds in total) a. Example: In step 1 you use a 2030 bond for Co. A, a 2040 bond for Co. B and a 2045 bond for Co. C. So, you choose a 2045 bond from Co. A and a 2045 bond from Co. B to be able to compare to the already selected 2045 bond from Co. C. b. Provide the key details for the additional bonds including spread to treasury. These two bonds are not included in your portfolio but will be useful in your overall analysis. 4. Your research indicates: a. Treasury bond rates will increase, and, b. The spread between corporate bonds and Treasury bonds will widen. 5. Forecast a change in yields for the three bonds in your portfolio. Discuss the properties of your three-bond portfolio with respect to returns and risk (interest rate risk and default risk). Including: What assumptions drive your change in treasury bond rates? What assumptions drive your change in spreads for each bond? How would you change the weights of the bonds in the portfolio (from equal) to take advantage of your research? How would you quantify the impact? What happens to the interest rate risk and default risk in your portfolio?

You have $10,000 and want to invest $4,000 in Stock A, and $6,000 in Stock B. 1. What is expected rate of return for Stock A? 2. What is the variance of Stock A? 3. What is the standard deviation for Stock A? 4. What is the coefficient variation for Stock A? 5. What is expected rate of return for Stock B? 6. What is variance of Stock B? 7. What is the standard deviation for Stock B? 8. What is coefficient variation for Stock B? 9. What is the expected return of the 2-security portfolio? 10. What is the co-variance between Stock and Stock B? 11. What is the correlation coefficient between Stock A and Stock B? 12. What is the variance of the 2-security portfolio? 13. What is the standard deviation of the 2-security portfolio? 14. What is the coefficient variation of the 2-security portfolio? Juan lent)

2) Courtney's car parts company common stock has a beta of 1.2. If the risk free rate's 3.3% and the expected return in the market is 12%. What is the company's cost of equity? (10 points)

5) IPO Pricing. The following material represents the cover page and summaryof the prospectus for the initial public offering of the Pest InvestigationControl Corporation (PICC), which is going public tomorrow with firmcommitment initial public offerings managed by the investment-banking firmof Erlanger and Ritter. Answer the following questions: a. Assume that you know nothing about PICC other than the informationcontained in the prospectus. Based on your knowledge of finance,what is your prediction of price of PICC tomorrow? Provide a shortexplanation of what you think this occur. b. Assume that you have several thousand dollars to invest. When youget home from class tonight, you find that your stockbroker, whom youhave not talked to for weeks, has called. She has left a message thatPICC is going public tomorrow and that she can get you severalhundred shares at the offering price if you call her back first thing inthe morning. Discuss the merits of this opportunity.