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(A) Why it is very important for an analyst to have a strong fundamental understanding to the financial statements? Do you believe that there is

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(A) Why it is very important for an analyst to have a strong fundamental understanding to the financial statements? Do you believe that there is ability for the financial analyst to forecast the future of a company using the financial statements? Explain how he can forecast by looking on the historical information? Give Example or you can make one using any company you maybe know. (8 marks) (B) You would like to buy a bond that has 10 years to maturity with 7% coupon rate, and $1,000 face value. If your required rate of return is 6% and the bonds pay interest semi-annually, what is the value of this bond? (4 marks) (C) You have $10,000 and want to invest this money as 60% in stock A and 40% in stock B. The expected rate of return on share A is 10% and for B is 15%, the standard deviation of stock A is 9% and stock B is 13%, the correlation between the two shares is -0.7, find the following: 1- The portfolio expected rate of return. (4 marks) 2- The portfolio standard deviation STD (risk). (4 marks) (A) Why it is very important for an analyst to have a strong fundamental understanding to the financial statements? Do you believe that there is ability for the financial analyst to forecast the future of a company using the financial statements? Explain how he can forecast by looking on the historical information? Give Example or you can make one using any company you maybe know. (8 marks) (B) You would like to buy a bond that has 10 years to maturity with 7% coupon rate, and $1,000 face value. If your required rate of return is 6% and the bonds pay interest semi-annually, what is the value of this bond? (4 marks) (C) You have $10,000 and want to invest this money as 60% in stock A and 40% in stock B. The expected rate of return on share A is 10% and for B is 15%, the standard deviation of stock A is 9% and stock B is 13%, the correlation between the two shares is -0.7, find the following: 1- The portfolio expected rate of return. (4 marks) 2- The portfolio standard deviation STD (risk). (4 marks)

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