投资学精要-博迪-第八版-课后答案-Chapter2

Chapter02-AssetClassesandFinancialInstruments2-1CHAPTER02ASSETCLASSESANDFINANCIALINSTRUMENTS1.Commonstockisanownershipshareinapubliclyheldcorporation.Commonshareholdershavevotingrightsandmayreceivedividends.Preferredstockrepresentsnonvotingsharesinacorporation,usuallypayingafixedstreamofdividends.Whilecorporatebondsarelong-termdebtbycorporations,typicallypayingsemi-annualcouponsandreturningthefacevalueofthebondatmaturity.2.WhiletheDJIAhas30largecorporationsintheindex,itdoesnotrepresenttheoverallmarketnearlyaswellasthe500stockscontainedinTheWilshireindex.TheDJIAissimplytoosmall.3.Theyareshortterm,verysafe,andhighlyliquid.Also,theirunitvaluealmostneverchanges.4.Treasurybills,certificatesofdeposit,commercialpaper,bankers’acceptances,Eurodollars,repos,reserves,federalfundsandbrokers’calls.5.AmericanDepositoryReceipts,orADRs,arecertificatestradedinU.S.marketsthatrepresentownershipinsharesofaforeigncompany.Investorsmayalsopurchasesharesofforeigncompaniesonforeignexchanges.Lastly,investorsmayuseinternationalmutualfundstoownsharesindirectly.6.Becausetheyproducecouponsthataretaxfree.7.Thefedfundsrateissimplytherateofinterestonveryshort-termloansamongfinancialinstitutions.TheLondonInterbankOfferRate(LIBOR)istherateatwhichlargebanksinLondonarewillingtolendmoneyamongthemselves.8.Generalobligationbondsarebackedbythelocalgovernments,whilerevenuebondshaveproceedsattachedtospecificprojects.Arevenuebondhaslessguarantees,therefore,itisriskierandwillhaveahigheryield.9.Corporationsmayexclude70%ofdividendsreceivedfromdomesticcorporationsinthecomputationoftheirtaxableincome.10.Limitedliabilitymeansthatthemostshareholderscanloseineventofthefailureofthecorporationistheiroriginalinvestment.11.Moneymarketsecuritiesarereferredtoas“cashequivalents”becauseoftheirgreatliquidity.Thepricesofmoneymarketsecuritiesareverystable,andtheycanbeconvertedtocash(i.e.,sold)onveryshortnoticeandwithverylowtransactioncosts.Chapter02-AssetClassesandFinancialInstruments2-212.Taxableequivalentyield=.0675/(1-.35)=.103813.a.Thetaxablebond.Withazerotaxbracket,theafter-taxyieldforthetaxablebondisthesameasthebefore-taxyield(5%),whichisgreaterthantheyieldonthemunicipalbond.b.Thetaxablebond.Theafter-taxyieldforthetaxablebondis:0.05x(1–0.10)=4.5%c.Youareindifferent.Theafter-taxyieldforthetaxablebondis:0.05x(1–0.20)=4.0%Theafter-taxyieldisthesameasthatofthemunicipalbond.d.Themunicipalbondoffersthehigherafter-taxyieldforinvestorsintaxbracketsabove20%.14.Theafter-taxyieldonthecorporatebondsis:[0.09x(1–0.30)]=0.0630=6.30%.Therefore,themunicipalsmustofferatleast6.30%yields.15.Theequivalenttaxableyield(r)is:r=rm/(1–t)a.4.00%b.4.44%c.5.00%d.5.71%16.a.Youwouldhavetopaytheaskedpriceof:107:27=107.8438%ofpar=$1,074.438b.Thecouponrateis4.875%,implyingcouponpaymentsof$48.75annuallyor,moreprecisely,$24.375semiannually.c.Currentyield=Annualcouponincome/price=4.875/107.8438=0.0452=4.52%17.a.Theclosingpricetodayis$74.92,whichis$1.82belowyesterday’sprice.Therefore,yesterday’sclosingpricewas:$74.92+$1.82=$76.74b.Youcouldbuy:$5,000/$74.92=66.74sharesc.Yourannualdividendincomewouldbe1.90%of$5,000,or$95.d.Earningspersharecanbederivedfromtheprice-earnings(PE)ratio.Chapter02-AssetClassesandFinancialInstruments2-3Price/Earnings=13andPrice=$74.92sothatEarnings=$74.92/13=$5.763118.a.Att=0,thevalueoftheindexis:(90+50+100)/3=80Att=1,thevalueoftheindexis:(95+45+110)/3=83.3333Therateofreturnis:(83.3333/80)–1=4.167%b.Intheabsenceofasplit,stockCwouldsellfor110,andthevalueoftheindexwouldbe:(95+45+110)/3=83.3333Afterthesplit,stockCsellsat55.Therefore,weneedtosetthedivisor(d)suchthat:83.3333=(95+45+55)/d…..d=2.340c.Therateofreturniszero.Theindexremainsunchanged,asitshould,sincethereturnoneachstockseparatelyequalszero.19.a.Totalmarketvalueatt=0is:(9,000+10,000+20,000)=39,000Totalmarketvalueatt=1is:(9,500+9,000+22,000)=40,500Rateofreturn=(40,500/39,000)–1=3.85%b.Thereturnoneachstockisasfollows:Ra=(95/90)–1=0.0556Rb=(45/50)–1=–0.10Rc=(110/100)–1=0.10Theequally-weightedaverageis:[0.0556+(-0.10)+0.10]/3=0.0185=1.85%20.Thefundwouldrequireconstantreadjustmentsinceeverychangeinthepriceofastockwouldbringthefundassetallocationoutofbalance.21.Itwouldincreaseby19points.(60–3)/3=1922.Price3.4%x(87/360)=0.8217%ora$priceof$10,000x(1-.008217)=$9,917.83EquivalentYield10,000/9,9917.83=1.0083x365/87=4.23%Chapter02-AssetClassesandFinancialInstruments2-423.a.Thehighercouponbondb.Thecallwiththelowerexercisepricec.Theputonthelowerpricedstock24.a.TheDecembermaturityfuturespriceis$5.116perbushel.Ifthecontractclosesat$5.25perbushelinDecember,yourprofit/lossoneachcontract(fordeliveryof5,000bushelsofcorn)willbe:($5.25-$5.116)x5000=$670gain.b.Thereare5114,099contractsoutstanding,representing570,495,000bushelsofcorn.25.a.Yes.Aslongasthestockpriceatexpirationexceedstheexerciseprice,itmakessensetoexercisethecall.Grossprofitis:$111-$105=$6Netprofit=$6–$22.40=$16.40lossRateofreturn=-16.40/22.40=-.7321or73.21%lossb.Yes,exercise.Grossprofitis:$111-$100=$11Netprofit=$11–$22.40=$11.40lossRateofreturn=-11.40/22.40=0.5089or50.89%lossc.Ap