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Looking for assistance in answering the attached questions. Please let me know if you have any questions about the attachment 1. Advanced Micro Devices (NYSE:
Looking for assistance in answering the attached questions. Please let me know if you have any questions about the attachment
1. Advanced Micro Devices (NYSE: AMD) is currently trading at $20.75 on the NYSE. Advanced Micro Devices is also listed on NASDAQ and assume it is currently trading on NASDAQ at $20.50. Required: Does an arbitrage opportunity exist and if so how would you exploit it and how much would you make on a block trade of 1,000 shares? (4 marks) 2. Required: Can the nominal interest rate ever be negative? Can the real interest rate ever be negative? Explain. (4 marks) 3. Required: What is the relationship between a bond's price and its yield to maturity? (2 marks) 4. Growing Real Fast Company (GRF) is expected to have a 25 percent growth rate for the next four years (affecting D1, D2, D3, and D4). Beginning in year five, the growth rate is expected to drop to 7 percent per year and last indefinitely. Required: If GRF just paid a $2.00 dividend and the appropriate discount rate is 15 percent, then what is the value of a share of GRF? (4 marks) 5. Consider two mutually exclusive projects with the following cash flows: Project C/F0 C/F1 C/F2 C/F3 C/F4 C/F5 C/F6 A $(41,215) $12,500 $14,000 $16,500 $18,000 20,000 N/A B $(46,775) $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 Required: If the discount rate for project B is 15%, then what is the NPV for project B? (4 marks)Step by Step Solution
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