All Matches

Solution Library

Expert Answer

Textbooks

Search Textbook questions, tutors and Books

Oops, something went wrong!

Change your search query and then try again

Result Not Found

Books FREE
Tutors
Study Help
Hire a Tutor
AI Study Help New

Search
Sign In
Register

study help
business
fundamentals of investing

Questions and Answers of Fundamentals Of Investing

5. Do you believe Marilyn has thought about her real estate investment objectives enough? Why or why not?
4. Could Marilyn increase her returns by assuming the existing mortgage at a 9.75% interest rate rather than arranging a new loan? What measure of return do you believe Marilyn should use to make
3. What is the estimated yield for this proposed investment?
2. At a 15% required rate of return, will this investment produce a positive net present value?
1. What is the expected annual after-tax cash flow (ATCF) for each of the three years (assuming Marilyn has other passive income that can be used to offset any losses from this property)?
5. If Gary could buy Waba Oaks for $10 000 less than its market value, would it be a good investment for him?Explain
4. In your opinion, what is a reasonable estimate of the market value for the Waba Oaks?
3. Should Gary accept the owner’s income statement as the basis for an income appraisal of Waba? Why or why not?
2. Gary has studied economics and knows about demand and supply, yet he doesn’t understand how to apply them to an investment analysis. Advise Gary in a practical way how he might incorporate
1. Using Figure 17.1 on page 554 as a guide, discuss how you might go about evaluating the features of this property.
P17.4 Jane Foster has estimated the annual after-tax cash flows (ATCFs) and after-tax net proceeds from the sale (CFR) of a proposed real estate investment as noted below for the planned four-year
P17.3 William Hubble is contemplating selling rental property that originally cost $200 000. He believes that it has appreciated in value at an annual rate of 6% over its four-year holding period. He
P17.2 In the coming year, the Sandbergs expect a potential rental property investment costing$120 000 to have gross potential rental income of $20 000, vacancy and collection losses equalling 5% of
P17.1 Charles Cook, an investor, is considering two alternative financing plans for purchasing a parcel of real estate costing $50 000. Alternative X involves paying cash; alternative Y involves
Q17.5 Assume you’re interested in investing in gold to protect against an expected significant decline in consumer confidence and securities values.a. Isolate and evaluate the various alternatives
Q17.4 Contact a stockbroker and obtain and study a copy of a product disclosure statement for a popular real estate investment trust (REIT).a. Indicate what type of REIT (equity, mortgage or hybrid)
Q17.3 Contact a local real estate agent and obtain a copy of a valuation he or she has performed on an investment property in your immediate general geographic area.a. Review the analysis and
Q17.2 Imagine that you have been hired by a wealthy out-of-town investor to find him a residential income property investment with five to 10 units located within a five-mile radius of the college or
Q17.1 Assume you have inherited a large sum of money and wish to use part of it to make a real estate investment.a. Would you invest in income property or speculative property? Why? Describe the key
17.21 What are some popular types of collectibles? What important variables should be taken into account when investing in them?
17.20 Describe the different ways in which one can hold gold and other precious metals as a form of investing. Discuss gemstone investments in terms of quality, commissions and liquidity.
17.19 What are the three basic forms of tangible investments? Briefly discuss the investment merits of tangibles. Be sure to note the key factors that affect the future prices of tangibles.
17.18 What are tangibles? Briefly describe the conditions that tend to cause tangibles to rise in price.
17.17 Briefly describe the basic structure and investment considerations associated with a real estate investment trust (REIT). What are the three basic types of REITs?
17.16 Explain why, despite its being acceptable on the basis of NPV or of yield, a real estate investment still might not be acceptable to a given investor?
17.15 Define depreciation from a tax viewpoint. Explain why it is said to offer tax shelter potential. What real estate investments provide this benefit? Explain.
17.14 List and briefly describe the five steps in the framework for real estate investment analysis shown in Figure 17.1.
17.13 What is the net present value (NPV)? What is the yield ? How are the NPV and yield used to make real estate investment decisions?
17.12 What is net operating income (NOI)? What are after-tax cash flows (ATCFs)? Why do real estate investors prefer to use ATCFs?
17.11 What is leverage, and what role does it play in real estate investment? How does it affect the risk–return parameters of a real estate investment?
17.10 What is real estate investment analysis? How does it differ from the concept of market value?
17.9 Briefly describe each of the following approaches to real estate market value:a. Cost approachb. Comparative sales approachc. Income approach
17.8 What is the market value of a property? What is real estate appraisal? Comment on the following statement: ‘Market value is always the price at which a property sells’.
17.7 Are real estate markets efficient? Why or why not? How does the efficiency or inefficiency of these markets affect both promotion and negotiation as parts of the property transfer process?
17.6 How do restrictions on use, location, site, improvements and property management affect a property’s competitive edge?
17.5 What role does demand and supply play in determining the value of real estate? What are demographics and psychographics, and how are they related to demand? How does the principle of
17.4 Briefly describe the following important features to consider when making a real estate investment.a. Physical propertyb. Property rightsc. Time horizond. Geographic area
17.3 Define and differentiate between income property and speculative property. Differentiate between and give examples of residential and commercial income properties.
17.2 How does real estate investment differ from securities investment? Why might adding real estate to your investment portfolio decrease your overall risk? Explain.
17.1 Define and differentiate between real estate and other tangibles. Give examples of each of these forms of investment.
2. A group of speculators are interested in the Bradman preference shares as the current market interest rates are quite volatile. These speculators hope to gain from the potential movement in market
1. The Bradman Corporation issued preference shares with a stated dividend of 8% of par.Preference shares of this type currently yields 7% with a par value of $75. Assume that the company has 800 000
4. What are the investment merits of this transaction? What are its risks?
3. Would you recommend that she buy the LaRamie preference shares? Why?
2. What return will this investment offer over the three-year holding period if all the expectations about it come true (particularly with regard to the price it is supposed to reach)? How much
1. If preference shares yields behave as Penni’s stockbroker thinks they will, what will be the price of the LaRamie$5 preference shares in three years?
P16.7 Changes in international relations prove Charlene Weaver’s expectations of a drop in market interest rates wrong (see Problem 16.6). She has purchased the $7 dividend preference shares for
P16.6 Charlene Weaver likes to speculate with preference shares by trading on movements in market interest rates. Right now, she believes the market is poised for a big drop in rates.Accordingly, she
P16.5 CJ Co. has a preference share outstanding that pays annual dividends of $3.50 a share. At what price would this share be trading if market yields were 7.5%? Use one of the dividend valuation
P16.4 Using the resources available at your campus or public library, or on the Internet, identify a preference share and determine the following:a. The share’s latest market priceb. Its dividend
P16.3 You purchased 100 $2 preference shares one year and one day ago for $25 per share. You sold them today for $30 per share. Assuming you are in a 25% tax bracket, calculate your aftertax holding
P16.2 The Granger Company has 500 000 $2 preference shares outstanding. It generates an EBIT of $40 million and has annual interest payments of $2 million. Given this information, determine the fixed
P16.1 An adjustable-rate preference share is currently selling at a dividend yield of 9%. Assume that the dividend rate on the share is adjusted once a year and that it is currently paying an annual
Q16.2 Is it possible for a firm to pass (miss) dividends on preference shares, even if it earns enough to pay them? Explain. What usually happens when a company passes a dividend on a cumulative
Q16.1 Briefly describe each of the following, and note how each differs from a conventional preference share.a. Convertible preference shareb. Floating-rate preference share As an investor, why would
16.7 Identify several investment uses of preference shares. Would they be suitable for both conservative and aggressive investors? Explain.
16.6 Discuss why dividend yield is critical in evaluating the investment merits of high-grade preference shares during periods when market yields are expected to decline.
16.5 Describe how high-grade preference shares are priced in the market. What role does dividend yield play in the valuation of preference shares? Could you use the zero-growth dividend valuation
16.4 Distinguish a cumulative preference share from a callable preference share. Do cumulative dividend provisions and call features affect the investment merits of preference issues? Explain.
16.3 What are the advantages and the disadvantages of investing in preference shares?
16.2 In what ways is a preference share like equity? In what ways is it like a bond?
16.1 Define the term preference share. What types of prior claims do preference shareholders enjoy?
Understand the various measures of investment worth, and identify several investment strategies that can be used with preference shares.
Discuss the rights and claims of preference shareholders, and note some of the popular issue characteristics that are often found with these securities.
Describe the basic features of preference shares, including sources of value and exposure to risk.
5. Calculate the return on invested capital earned on this transaction (remember that the return is based on the amount of funds actually invested in the contract, rather than on the value of the
4. Assume that June greasy wool actually settles at 1125; you decide to sell and take your profit. What is the selling price of the greasy wool commodity contracts?
3. What is the purchase price of the greasy wool commodity contracts you control according to the June settlement date?
2. What is the total amount of kilograms of greasy wool that you control?
1. What is the total amount of your initial deposit for the five contracts?
4. What if, instead of hedging with futures contracts, the Pernellis decide to set up the hedge by using futures options? Now, suppose a put on the ASX 200 Index futures contract (strike price =
3. Assume that the value of the Pernellis’ portfolio declined by $32 000, while the level of an ASX 200 Index futures contract moved from 3256 to 2776. (Assume that Jim and Polly short sold two
2. Assume that ASX 200 futures contracts are currently being quoted at 3256. How many contracts would the Pernellis have to buy (or sell) to set up the hedge?a. Say the value of the Pernellis’
1. Explain why the Pernellis’ would want to use market-index futures to hedge their share portfolio, and note how they would go about setting up such a hedge. Be specific.a. What alternatives do
4. What risks do you see in the recommended short-sale transaction? What is your assessment of T.J.’s new interest in financial futures? How do you think it compares to his established commodities
3. What happens if rates go down? For example, how much will T.J. make if the yield on bank bill futures goes down by just 0.25%?
2. How much profit will T.J. make if he short sells four contracts at 94.35 and bank bill yields do go up 0.5%—that is, if T.J. covers his short position when bank bill futures contracts are quoted
1. Assume 90-day bank bill futures are now being quoted at 94.35.a. Determine the current price (underlying value) of this bank bill futures contract.b. What would this futures contract be quoted at
P15.6 Not long ago, Vanessa Wong sold the company she founded for several million dollars(after taxes); she took some of that money and put it into the sharemarket. Today, Vanessa’s portfolio of
P15.5 A wealthy investor holds four three-year Treasury bonds; these bonds are currently being quoted at 94, giving a total value of $465 006.28. The investor is concerned, however, that rates are
P15.4 Annie Ryan has been an avid sharemarket investor for years. She manages her portfolio fairly aggressively and likes to short sell whenever the opportunity presents itself. Recently, she has
P15.3 Mark Seby is thinking about doing some speculating in interest rates. He thinks rates will fall and, in response, the price of three-year Treasury bond futures should move from 94.89, their
P15.2 Shirley McCain is a regular commodities speculator. She is currently considering a short position in August fine wool, which is now trading at 1245. Her analysis suggests that August fine wool
P15.1 Jeff Rink considers himself a shrewd commodities investor. Not long ago he bought one July wheat contract at $172.25 per tonne, and he recently sold it at $180.50 per tonne. How much profit did
Q15.3 Listed below are a variety of futures transactions. On the basis of the information provided, indicate how much profit or loss you would make in each of the transactions. (Hint: You might want
Q15.2 Using settlement prices from Figures 15.2 and 15.4, find the value of the following commodity and financial futures contracts.a. August 2011 fine woolb. October 2011 greasy woolc. June 2011 ASX
Q15.1 Obtain a recent copy of the Australian Financial Review and look in the ‘Market Wrap’section of the paper for the futures quotes.a. List a representative example of futures contracts from
15.15 What are futures options? Explain how they can be used by speculators. Why would an investor want to use an option on an interest rate futures contract rather than the futures contract itself?
15.14 Discuss how market-index futures can be used for speculation and for hedging. What advantages are there to speculating with market-index futures?
15.13 Describe a market-index future and contrast it with an interest rate future.
15.12 What are the differences between a forward agreement and a futures contract?
15.11 What is the difference between physical commodities and financial futures? What are their similarities?
15.10 Explain why you should be well versed in the behaviour and investment characteristics of commodities futures when investing in this market. Why should futures holdings be well diversified?
15.9 Note several approaches to investing in commodities and explain the investment objectives of each.
15.8 What is the one source of return on futures contracts? What measure is used to calculate the return on a commodity contract?
15.7 Briefly define each of the following:a. Settlement priceb. Open interestc. Delivery month
15.6 List and briefly define the four essential parts of a commodity contract. Which parts have a direct bearing on the price behaviour of the contract?
15.5 Explain how margin trading is conducted in the futures market.a. What is the difference between an initial margin deposit and a minimum margin?b. Are investors ever required to put up an
15.4 Why are both hedgers and speculators important to the efficient operation of a futures market?
15.3 What is the main source of return to commodities speculators? How important to these investors is current income from dividends and interest?

Showing 1 - 100 of 1874

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Last

Services

Sitemap
Fun
Definitions
Become Tutor
Study Help Categories
Recent Questions
Expert Questions

Company Info

Security
Copyrights
Privacy Policy
Terms & Conditions
SolutionInn Fee
Scholarship

Get In Touch

About Us
Contact Us
Career
Jobs
FAQ
Campus Ambassador

Secure Payment

Download Our App

© 2024 SolutionInn. All Rights Reserved