UB MGF 401 - MGF301_Assignment_1_-_Spring_2011 (2 pages)

Previewing page 1 of 2 page document View the full content.
View Full Document

MGF301_Assignment_1_-_Spring_2011



Previewing page 1 of actual document.

View the full content.
View Full Document
View Full Document

MGF301_Assignment_1_-_Spring_2011

1353 views


Pages:
2
School:
University at Buffalo, The State University of New York
Course:
Mgf 401 - Financial Institutions
Unformatted text preview:

ASSIGNMENT 1 MGF 301 Corporation Finance Spring 2010 DUE Wednesday February 9th at 3 30pm in Jacobs 365 You may in a group of up to 4 on this Assignment Please indicate clearly on all submitted Assignments who the members of the group are Please note all assignments submitted with more than 4 group members will automatically receive a 0 grade No late assignments will be accepted You may hand in the assignment in person in Jacobs 365 put it under the door if no one is there or submit it by email to the SafeAssign link in the Assignments section of UBLearns Note If you use Electronic submission please follow all the rules for UBLearns Assignment submissions in the Syllabus Answer all of the following questions For each answer show your work to get full points stating the answer alone is not sufficient 1 If your last name start with A K you should select one stock that you believe will go up in value the most over the semester If your last name starts with L Z you should select three stocks that you believe will go up the most over the semester Once you have selected your stocks join the class group MGF310 Assign1 at Smartstocks com and buy the stock s you have selected To buy stocks at Smartstocks com you need to first create an account Use whatever name and password you want to create this account note you do not have to use your name or any real information about yourself This account is free to create and you do not need to sign up for any of the services offered Once you have created an account click on Group Features on the left side of the screen to enter the group section Then click on Join a Group Scroll through the list to find MGF301 Assign 1 and enter the password mgf301 If you then go to Portfolio you should then see that you are a member of the group To buy stock find the ticker symbol from an online source such as Yahoo Finance and enter the ticker symbol with the number of shares you wish to purchase If you are buying one stock put at least 950 000 into the one stock If you are buying three stocks put at least 300 000 into each of the three stocks Please include your userid and the stock you bought as your answer to question 1 on this assignment Note please do not do any further trading in this account for the remainder of the semester we are running an experiment that we will evaluate throughout the semester 2 Your uncle died last year and left you money in his will You are to receive 300 000 four years from today i e in time 4 a What is the value of the inheritance today in time 0 if the appropriate discount rate is 4 and you compound annually b If you invest the money when you receive it in time 4 how much will it grow to 50 years from today i e in time 50 if you earn 4 each year 3 Your neighbor is buying a new recreational vehicle RV He has the following options to finance the RV I Pays 55 000 today in time 0 II Buy under a delayed payment program requiring payments of 11 000 in time 1 12 000 in time 2 13 000 in time 3 and 14 000 in time 4 and 15 000 in time 5 III Make 72 monthly payments over 6 years of 900 payable at the end of each month a If the interest rate is 6 5 annually calculate the present value of each option b What is the interest rate where Option I and Option II have the same present value 4 a If you will be making equal deposits into a retirement account for the next 10 years with each payment at the end of the year 1 through 10 how much must you deposit each year if the account earns 5 compounded annually and you wish the account to grow to 300 000 45 years from today in time 45 b How does your answer change if the account pays interest compounded monthly at an annual rate of 5 Note use monthly compounding for all calculations 5 a You belong to an unusual pension plan because your retirement payments will continue forever and will go to your descendants after you die If you will receive 36 000 per year at the end of each year starting 40 years from now what is the present value of your retirement plan if the discount rate is 3 5 b How does your answer change if you receive 3 000 per month every month starting 40 years from today in monthly time period 480 and the discount rate is still 035


View Full Document

Access the best Study Guides, Lecture Notes and Practice Exams

Loading Unlocking...
Login

Join to view MGF301_Assignment_1_-_Spring_2011 and access 3M+ class-specific study document.

or
We will never post anything without your permission.
Don't have an account?
Sign Up

Join to view MGF301_Assignment_1_-_Spring_2011 and access 3M+ class-specific study document.

or

By creating an account you agree to our Privacy Policy and Terms Of Use

Already a member?