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Imagine, we are in ancient Greece. Praxilla lives in Athens and derives utility from reading poems and from eating cucumbers. Praxilla gets 30 units of marginal utility from her first poem, 27 units of marginal utility from her second poem, 24 units of marginal utility from her third poem, and so on, with marginal utility declining by three units for each additional poem. Praxilla gets six units of marginal utility for each of her first three cucumbers consumed, five units of marginal utility for each of her next three cucumbers consumed, four units of marginal utility for each of the following three cucumbers consumed, and so on, with marginal utility declining by one for every three cucumbers consumed. A poem costs three bronze coins, but a cucumber only costs one bronze coin. Praxilla has 18 bronze coins
When assessing risk, a rational investor will never use:
a. standard deviation of return
b. normal probability distribution as a general characteristic of financial market
c. variance of either return series or stock price series
d. probability of a loss
e. potential loss
When assessing risk, a rational investor will never use:
a. standard deviation of return
b. normal probability distribution as a general characteristic of financial market
c. variance of either return series or stock price series
d. probability of a loss
e. potential loss*
A share yields the following future dividends: 40 €, 20 €, 50 €. The opportunity cost of investment, as quantified by a finance practitioner is 7%. The share can be bought today for 200 € and is going to be sold for 250 €, after 3 years. The percentage value dividend yield and the net present value of this financial investment, are:
a. 159% and 250 €
b. 73% and 180 €
c. 34% and 120 €
d. 55% and 100 €
e. 25% and 120 €
Expected return is basically computed based on:
a . values of predicted returns and their attached probabilities
b. the geometric average of dividend yields
c. values of historical market prices times the market capitalization
d. the average value of GDP indexes
e. the variability of return
Which one of the following affirmations is false?
a.CAGR is computed by means of geometric average
b. the nominal profit of a financial investment does not involve opportunity cost
c. a t-bill is a rather safe investment alternative
d.geometric average is based on the compounding (interest) rate principle
e. given the same HPR, effective annual rate is always smaller than annual percentage rate
How much should you deposit today in a deposit that pays monthly compounded interest, if the final value of the deposit will be 70 000 $, in 12 years time, and the APR is 2%?
a. 35 783 $
b. 54 812 $
c. 49 472 $
d. 67 529 $
e. 32 567 $
What is the present value of a perpetual flow of constant payments of 1 550 currency units, for an individual investor, if the average perpetual expected interest rate is assumed 4.5%?
a. 34 343.43
b. 34 444.44
c. 43 444.44
d. 43 434.34
e. 43 333.33
An investor evaluates the present value of a perpetual flow of constant payments of 1 550 currency units at 35 000 currency units. Which is the average perpetual expected interest rate, considered in this valuation?:
a. 3.44%
b. 4.43%
c. 4.34%
d. 3.34%
e. 3.77%
gross national product birr 5000, indirect taxes birr 580, net domestic product birr 5900, net national product birr 4250 the a) calculate gross domestic product b) net national income at factor cost c) calculate net factor income
