答案和详解如下: Answer 96 The correct answer was A) purchase the stock. It is undervalued by approximately $8.00. To determine whether the trader should purchase the stock, we need to determine if the stock is overvalued or undervalued. Given the information in this problem, we will use the price/earnings (P/E) ratio and the earnings per share (EPS) to calculate an estimated value. The P/E ratio = dividend payout ratio / (ke – g), dividend payout ratio = 1 - retention ratio = 1 – 0.35 = 0.65 g = retention rate × ROE = 0.65 × 0.13 = 0.0845 P/E = 0.35 / (0.11 – 0.0845) = 13.725 EPS = [(sales per share × gross profit margin) – dividends per share – interest expense per share] × (1 - tax rate) = [($175 × 0.22) - $20 - $12] × (1 – 0.40) = $3.90 Value of stock = EPS × P/E = 13.725 × $3.90 = approximately $53.50 Conclusion: The trader should purchase a block of the stock. It is undervalued by the difference between the market price and the estimated value, $53.50 - $45.50, or approximately $8.00. This question tested from Session 14, Reading 59, LOS b
Answer 97 The correct answer was A) Bond insurance is an example of external, not internal, credit enhancement. This question tested from Session 15, Reading 64, LOS i, (Part 2)
Answer 98 The correct answer was A) short-maturity bonds with high coupon rates. The price volatility of non-callable bonds is inversely related to the level of market yields. As yields increase, bond prices fall, and the price curve gets flatter. Bonds with higher duration will change more in price. Longer maturity bonds with lower coupon rates are more sensitive to interest rate risk and their price will decrease more than short term, high coupon rate bonds. High yield ("junk") bonds with high coupons become more risky in high interest rate environments and therefore would not be appropriate. This question tested from Session 15, Reading 63, LOS c
Answer 99 The correct answer was A) $438 $562
N = 12 × 2 = 24; I/Y = 7 / 2 = 3.5; FV = 1000; PMT = 0; CPT PV = -437.95, or approximately $438. So, interest = Face Value – Price = 1000 – 438 = 562. This question tested from Session 16, Reading 67, LOS e
Answer 100 The correct answer was A) +20 basis points. Convexity adjustment: +(Convexity)(change in i)2 Convexity adjustment = +(80)(-0.005)(-0.005) = +0.0020 or 0.20% or +20 basis points. This question tested from Session 16, Reading 69, LOS g, (Part 1)
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