Learn more about our help with Assignments: Math
Search & Filtering
Financial Math
Assume that the required rate of return on a stock is 15.6% and the expected return on the market is 14%. What is the risk-free rate if the stock has a beta of 1.2? *
Financial Math
Suppose that after making 50 payments,the interest rate changes to J2=9% p.a.
a)convert the interest rate J2=9% to J12 equivalent
b)Assuming that the family seeks to accept the change in interest rates,what would be their new payment based on the new interest rate?
c)Assuming that the family seeks to continue their initial monthly payment calculated in part 1,how many full payments would be required to pay off the loan and what would be the final concluding smaller payment one period later
a)convert the interest rate J2=9% to J12 equivalent
b)Assuming that the family seeks to accept the change in interest rates,what would be their new payment based on the new interest rate?
c)Assuming that the family seeks to continue their initial monthly payment calculated in part 1,how many full payments would be required to pay off the loan and what would be the final concluding smaller payment one period later
Financial Math
Let ( , ) ρ = w1 w2
be a portfolio of two securities. Find the value of w1
and w2
in the following
situations:
i) 1 ρ12 = − and ρ is risk-free.
ii) σ1 = σ2
and variance P is minimum.
iii) Variance on P is minimum and 2 ,5.0 ρ12 = − σ1 = and 3 σ2 = .
be a portfolio of two securities. Find the value of w1
and w2
in the following
situations:
i) 1 ρ12 = − and ρ is risk-free.
ii) σ1 = σ2
and variance P is minimum.
iii) Variance on P is minimum and 2 ,5.0 ρ12 = − σ1 = and 3 σ2 = .
Financial Math
7)Find and compare the future value after two years of a deposit of $100 attracting interest at a rate a) annually and b) semiannually.
8)Which will deliver a higher future value after one year, a deposit of $1, 000 attracting interest at 15% compounded daily, or at 15.5% compounded semi-annually?
9)What initial investment subject to annual compounding at 12% is needed to produce $1, 000 after two years?
10)Which will deliver a higher future value after one year, a deposit of $1, 000 attracting interest at 15% compounded daily, or at 15.5% compounded semi-annually?
11)What initial investment subject to annual compounding at 12% is needed to produce $1, 000 after two years?
12)Find the present value of $100, 000 to be received after 100 years if the interest rate is assumed to be 5% throughout the whole period and a) daily or b) annual compounding applies.
8)Which will deliver a higher future value after one year, a deposit of $1, 000 attracting interest at 15% compounded daily, or at 15.5% compounded semi-annually?
9)What initial investment subject to annual compounding at 12% is needed to produce $1, 000 after two years?
10)Which will deliver a higher future value after one year, a deposit of $1, 000 attracting interest at 15% compounded daily, or at 15.5% compounded semi-annually?
11)What initial investment subject to annual compounding at 12% is needed to produce $1, 000 after two years?
12)Find the present value of $100, 000 to be received after 100 years if the interest rate is assumed to be 5% throughout the whole period and a) daily or b) annual compounding applies.
Financial Math
1)The basic Economic Order Quantity model with constant demand serves as the foundation of inventory studies.
(i)State six assumptions of the basic Economic Order Quantity (EOQ) Model. Hence derive the optimal order quantity, explaining all the parameters used and show all steps used in arriving at your model.
(ii)Draw the costs in your model as a function of the replenishment quantity.
(iii)Show that the optimal total cost function is of the form where the terms have the usual meanings.
(iv)The all-units discount model was applied to the following quantity discount situation in which the demand rate is 500 units per year, ordering cost is GHS 40, and the annual holding cost rate is 20% of the unit cost. What order quantity do you recommend?
Discount Category Order Size Discount (%) Unit Cost (GHS)
1 0 to 99 0 10.0
2 100 or more 3 9.70
(i)State six assumptions of the basic Economic Order Quantity (EOQ) Model. Hence derive the optimal order quantity, explaining all the parameters used and show all steps used in arriving at your model.
(ii)Draw the costs in your model as a function of the replenishment quantity.
(iii)Show that the optimal total cost function is of the form where the terms have the usual meanings.
(iv)The all-units discount model was applied to the following quantity discount situation in which the demand rate is 500 units per year, ordering cost is GHS 40, and the annual holding cost rate is 20% of the unit cost. What order quantity do you recommend?
Discount Category Order Size Discount (%) Unit Cost (GHS)
1 0 to 99 0 10.0
2 100 or more 3 9.70
Financial Math
a)Define the following pertaining to inventory systems:
i.Deterministic Inventory Model
ii.Economic Order Quantity
iii.Reorder Point
iv.Lead Time
v.Backorder
b)Tele-Reco is a new specialty store that sells mobile phones, laptops and other computer accessories. A new Japanese-manufactured mobile phone reorder costs Tele-Reco $600 per unit. Tele-Reco’s annual holding cost rate is 22%. Ordering costs are estimated to be $70 per order.
i.If the demand for the new mobile phone is expected to be constant with a rate of 20 units per month, what is the recommended annual order quantity for the new mobile phone?
ii.What is the estimated annual inventory cost associated with this product?
iii.How many orders will be placed per year?
iv.With 250 working days, what is the cycle time for this product?
i.Deterministic Inventory Model
ii.Economic Order Quantity
iii.Reorder Point
iv.Lead Time
v.Backorder
b)Tele-Reco is a new specialty store that sells mobile phones, laptops and other computer accessories. A new Japanese-manufactured mobile phone reorder costs Tele-Reco $600 per unit. Tele-Reco’s annual holding cost rate is 22%. Ordering costs are estimated to be $70 per order.
i.If the demand for the new mobile phone is expected to be constant with a rate of 20 units per month, what is the recommended annual order quantity for the new mobile phone?
ii.What is the estimated annual inventory cost associated with this product?
iii.How many orders will be placed per year?
iv.With 250 working days, what is the cycle time for this product?
Financial Math
b)The office manager for the Gotham Life Insurance Company orders letterhead stationery from an office products firm in boxes of 500 sheets. The company uses 6,500 boxes per year. Annual carrying costs are $3 per box, and ordering costs are $28. The following discount price schedule is provided by the office supply company:
Order Quantity (boxes) Price per box ($)
200-999 16
1,000-2,999 14
3,000-5,999 13
6,000+ 12
Determine the optimal order quantity and the total annual inventory cost.
c)Determine the optimal order quantity and the total annual inventory cost, if the carrying cost is 20% of the price of a box of stationery.
Order Quantity (boxes) Price per box ($)
200-999 16
1,000-2,999 14
3,000-5,999 13
6,000+ 12
Determine the optimal order quantity and the total annual inventory cost.
c)Determine the optimal order quantity and the total annual inventory cost, if the carrying cost is 20% of the price of a box of stationery.
Financial Math
a)One of the most severe assumptions of the basic EOQ model is that the unit variable cost, c does not depend on the lot or replenishment quantity, Q. However, in many practical situations, quantity discounts exist, and taking advantage of them can result in substantial savings.
i.Distinguish between the All-units discount model and the Incremental discount model, and show how the variable costs of the All-units discount model look like functionally and graphically.
ii.Tabulate an algorithm that solves the all-units discount optimization problem.
i.Distinguish between the All-units discount model and the Incremental discount model, and show how the variable costs of the All-units discount model look like functionally and graphically.
ii.Tabulate an algorithm that solves the all-units discount optimization problem.
Financial Math
The real risk-free rate of interest is 3.8%. Inflation is expected to be 2.5% this year and 4.0% during the next 2 years. . Assume that the maturity risk premium is 0.5% for 2-year and 0.8% for 3-year period. What is the yield on 2-year Treasury securities? What is the yield on 3-year Treasury securities
Financial Math
Find the present and future value of $1000 received every month end for 20 years if the interest rate is J12 = 12% p.a.
