, poorT or wfor each of the following. Put your answer in the column to the righ
ID: 2601335 • Letter: #
Question
, poorT or wfor each of the following. Put your answer in the column to the right. sock A has high risk. Stock B has low risk. All else equal, which one has the higher required re Both A and B took out 30-year mortgages. A had a 14 points, 1 points each payment of $2000. B had a payment of $2200. All 18. else equal, who borrowed more money? hers off in 25 years. All el Both A and B took out equal, who paid more interest? Investment A has a quarterly interest rate of 3%. investment has the higher EAR? Investment A and B both pay interest of 5% 30-year mortgages. A paid his off in 28 years. B paid Investment B has a monthly interest rate of 1%. 40. per year. Investment A interest compounds quarterly, s, w 21. Investment 8 interest compounds semi-annually. You plan to invest for 5 year investment? Investment A has a future value of $600. Investment B has a future value of $500. Both have the s present value. All else equal, which one has the higher interest rate? Bond A is a 888 bond, Bond B is a AAA bond. All else equal, which one will have a higher yield to 22. maturity? Bond A is a par bond and Bond B is a discount bond. All else equal, which bond has the higher co 24. rate? Bond A is a municipal bond and Bond B is a corporate bond? Which bond should have the highe maturity? Bond A makes semi-annual interest payments of $30. Bond B makes an annual payment of $50 bonds have a yield of 5%, which bond has a higher price? Bond A is not callable, Bond B is callable. All else equal, which one is more risky? 25. 26 27. Bond A is a municipal bond and Bond B is a corporate bond. If you pay a very low tax rate, w most likely to be the better choice? Investment A is an annuity due and Investment B is an annuity. All else equal, which one w higher present value? Stock A has a holding period return of 10%. Stock B has a holding period return of 8%. If have a fair return of 996, which stock should you short? 29. 30.Explanation / Answer
Solution:-
17. Stock A
Explanation:- Higher the risk = Higher the required rate of return
18. B
Explanation:- Excess payment = excess borrowed
19. A
Explanation:- Excess number of installemnt = excess payment of interest
20. Investment B.
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