Bus 405 Principles of Investment Complete Class
BUS 405 PRINCIPLES OF INVESTMENT COMPLETE CLASS
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BUS 405 PRINCIPLES OF INVESTMENT COMPLETE CLASS
Week 1 Assignment Annualized Returns Chapter 3 problem 18
Complete problem 18 in Chapter 3 (shown below) and submit to the instructor. Show your work to
find the annualized return for each of the listed share prices. Write a 100 word analysis of the process
to calculate these annualized returns.
Suppose you have $28,000 to invest. You re considering Miller Moore Equine Enterprises (MMEE),
which is currently selling for $40 per share. You also notice that a call option with ... Show more
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Remember to complete all parts of the question and support your answers with examples from the text
and other resources.
Chapter 5 The Stock Market
Chapter 6 Common Stock Valuation
Chapter 7 Stock Price Behavior and Market Efficiency
Chapter 8 Behavioral Finance and the Psychology of Investing
Week 3 Assignment Bootstrapping Chapter 10 Problem 31
Complete problem 31 of Chapter 10 (shown below), and submit to your instructor. Show your
calculations and the algebraic manipulation of the price equation for the bond. In addition to solving
the problem, write a 100 to 200 word essay on the term structure of fixed income securities.
One method used to obtain an estimate of the term structure of interest rates is called bootstrapping.
Suppose you have a one year zero coupon bond with a rate of r1 and a two year bond with an annual
coupon payment of C. To bootstrap the two year rate, you can set up the following equation for the
price (P) of the coupon bond: /(1+r_1 )+(C_2+Par value)/(1+r_2 )^2
Because you can observe all of the variables except r2, the spot rate for two years, you can solve for
this interest rate. Suppose there is a zero coupon bond with one year to maturity that sells for $949 and
a two year bond with a 7.5 percent coupon paid annually that sells for $1,020. What is the interest rate
for two years? Suppose a bond with three years until maturity and an 8.5 percent annual coupon sells
for $1,029. What is the interest rate for three
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