You want to buy a car with a purchase price of $15,000.00. The loan that you have negotiated has the following terms: 3000 down payment, 4 years with monthly payments of $284.58. What are the nominal and effective rates of this loan?

Both Stock A and Stock B have an expected return of 15 perfect, a standard deviation of 20 percent, and a beta of 1.2. The returns of the two stocks are not perfectly correlated: the correlation coefficient is 0.6. You have put together a portfolio which is 50 percent Stock A and 50% Stock B. Which of the following is correct?

Statements:

The portfolio's standard deviation is 20 percent.

The portfolio expected return is 15 percent, and the portfolio standard deviation is less than 20 percent

The portfolio expected return is 18 percent

The portfolio's beta is less than 1.2

None of the statements is correct

Calculate the required rate of return for Mars Inc. stock. The Mar's beta is 1.2, the rate on a long-term T-bond is 6 percent, the expected return on the market is 11.5 percent. The market has average a 14 percent annual return over the last six years, and Mars has averaged a 14.4 return over the last six years.

Assume that the average firm in your company's industry is expected to grow at a constant rate of 5 percent, and its dividend yield is 4 percent. Your company is about as risky as the average firm in the industry, but it has just develop a line of innovative new products which leads you to expect that its earnings and dividends will grow at a rate of 40 percent (D1=D0(1+g) this year and 25 percent the following year after which growth should match the 5 percent industry average rate. The last dividend paid (D0) was $2. What is the value per share of your firm's stock?