Finance Answers

Gender bias is one of the ills of our society and thus impacts our workplace too.

Most progressive businesses are moving towards gender neutral policies for talent

acquisition & talent management. Explain how are businesses doing it?

If business ethics is understood under the concept of universal values then most of the

conflict among ethical values, the laws of state and the codes of the corporate world

could be eliminated. Any individual, professional, corporation or small & medium

business can make one or more of these universal values the focal point of their

business; be it trust, integrity, fairness, compassion etc and the rest of the values will

follow. Identify which two universal values influence you OR your

organization/business and discuss how this influence & focus has led to ethical decision

making and a better reputation for you OR your organization (Write about any ONE -

yourself or your organization).

A US based IT firm required GBP 100000 in 180 days. The company feels that exchange rates are expected to fluctuate in the next 6 months. Their near accurate estimate based on a good quality research were as below:

Current Rate of GBP = USD 1.50

180 days forward rate for GBP = USD 1.48

Call premium USD 0.02 (strike price of USD 1.50 for 180 days)

Interest Rates in London for deposits – 4.5% and for loans – 5.1%

Interest Rates in New York for deposits – 4.5% and for loans – 5.1%

A fair estimate of exchange rate after 180 days is expected to be USD 1.44 with a probability of 20%, USD 1.46 with a probability of 60% and USD 1.53 with a probability of 20%.

Advise the company on a good hedging strategy. Make suitable assumptions if required and state the same.

I am 18 years old. I attend the local vocational-technical school. My area of study is commercial

heating and cooling. My school tuition is relatively low and I will complete my program of study

in nine months. I can pay most of my expenses by working full-time in the summer and part-

time during the school year. I am still living at home, and I plan to get an apartment of my own

next year. I am an avid sports fan. I have a little 12-inch television. I'd like to use my credit card

to buy a flat screen 65-inch television set at a cost of $1 ,300.

Identify and describe an appropriate investment objective and set of investment constraints for the Maphosa foundation.

4. a. Someone in the 36 percent tax bracket can earn 9 percent annually on her investments

in a tax-exempt IRA account. What will be the value of a one-time $10,000 investment

in 5 years? 10 years? 20 years?

b. Suppose the preceding 9 percent return is taxable rather than tax-deferred and the taxes

are paid annually. What will be the after-tax value of her $10,000 investment after 5, 10,

and 20 years?

If yield curves, on average, were upward slopping, what would this say about the liquidity (term) premiums in the term structure? Would you be willing to accept the expectations theory? Why or Why not?

Year return (HPY) of C return (HPY) of F

2016 −18.00% −14.50%

2017 33.00% 21.80%

2018 15.00 % 30.50%

2019 −0.50% −7.60%

2020 27.00% 26.30%

Required

Calculate the geometric rate of return for each stock during the 5-year period. (6mks)

Calculate the standard deviation of returns for each stock. (10mks)

Calculate the coefficient of variation for each stock. (2mks)

If you are a risk-averse investor then, assuming these are your only choices, discuss whether you would prefer to hold Stock C or Stock F. (2mks)

True/False Statements: First, circle the right answer for the following statements, and then

provide your explanations. No marks will be awarded without correct explanations. (4 marks each) 1) If there is constant relative risk aversion, then there must be decreasing absolute risk aversion. True False

Describe how the prevailing interest rates in a country affect its exchange rates with the currency of its major trading partner.