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    Class Exercise 2 FINC 2101 Fall 2021

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    Youssef El-Deeb
    The document contains 10 sentences completing statements about various financial topics including secondary markets, corporate goals, endowments, roles of CEOs, risk, returns, future values of cash flows, compound interest, stock dividends and rates of return.

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    Class Exercise 2 FINC 2101 Fall 2021

    Uploaded by

    Youssef El-Deeb
    9 views2 pages
    The document contains 10 sentences completing statements about various financial topics including secondary markets, corporate goals, endowments, roles of CEOs, risk, returns, future values of cash flows, compound interest, stock dividends and rates of return.

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    Class exercise 2 FINC 2101 Fall 2021

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    The document contains 10 sentences completing statements about various financial topics including secondary markets, corporate goals, endowments, roles of CEOs, risk, returns, future values of cash flows, compound interest, stock dividends and rates of return.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    9 views2 pages

    Class Exercise 2 FINC 2101 Fall 2021

    Uploaded by

    Youssef El-Deeb
    The document contains 10 sentences completing statements about various financial topics including secondary markets, corporate goals, endowments, roles of CEOs, risk, returns, future values of cash flows, compound interest, stock dividends and rates of return.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Business Finance

    FINC 210101
    Fall 2021
    Class exercise (1)
    26.9.2021
    Complete the following sentences

    1. A secondary market is a financial market in which pre-owned securities


    are traded, while the primary market is the market for newly issued
    stocks and bonds.
    2. With regard to corporate goals, a corporation is mostly concerned with
    maximizing shareholders wealth.
    3. A college received a contribution to its endowment fund of $2 million.
    They can never touch the principal, but they can use the earnings. At an
    assumed interest rate of 9.5 percent, the college can earn 190000 to
    help its operations each year
    4. The chief executive officer is responsible for managing day to day
    operations and carrying out the policies established by the board of
    directors
    5. Risk is the chance of loss or the variability of returns associated with a
    given asset.
    6. Return of an asset is the change in value plus any cash distributions
    expressed as a percentage of the initial price or amount invested.
    7. $100 is received at the beginning of year 1, $200 is received at the
    beginning of year 2, and $300 is received at the beginning of year 3. If
    these cash flows are deposited at 12 percent, their combined future
    value at the end of year 3 is $727.37
    8. Calvin has inherited $6,000,000 from the death of Grandma Lana. He
    would like to use this money to buy a house $7,000,000 in 2 years from
    now in an account paying 8 percent compounded semi-annually. Calvin
    will have $7,019,151.36 to pay for the house.
    9. Perry purchased 100 shares of POL, Inc. common stock for $25 per
    share one year ago. During the year, POL, Inc. paid cash dividends of $2
    per share. The stock is currently selling for $30 per share. If Perry sells
    all of his shares of Ferro, Inc. today, her rate of return today is …….

    1
    10.The future value of $1000000 deposited at a 7.25% interest rate
    compounded annually for 6 years will be $---------

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