1) You have approached Which Bank for a loan to buy a house. The bank offers you a $400 000 loan,...1 answer below »

1) You have approached Which Bank for a loan to buy a house. The bank offers you a $400 000 loan, repayable in equal monthly instalments at the end of each month for the next 20 years. If the interest rate on the loan is 9% per annum, compounded monthly, how much will be your monthly repayment (to the nearest dollar)?

2) You earned a nominal rate of return of 10.77% on a bond that you bought one year ago. If the inflation rate last year was 3%, what was your total real rate of return on this investment?

3) You own a portfolio that is invested as follows: $11 600 of shares of Rendezvous hotel, $7800 of shares of Crown Plaza, $14 900 of shares of Carlton & United Breweries, and $3200 of shares of Domino’s Pizza . What is the portfolio weight of share of Carlton & United Breweries?

4) Rendevous Hotel, a Melbourne-based hotel, will need $3.4 million ten years from now to repair the damages caused by hail storm in 2020. Currently, the hotel has some extra cash and would like to establish a savings account for this purpose. The account pays 4.5% interest, compounded quarterly. How much money must the company deposit today to fully fund the repairs?

5) Best Brews Ltd did not pay a dividend in the last financial year. However, the company has indicated that it expects to earn $0.5 per share in this financial year and to pay out 15% of these earnings in dividends. Financial analysts expect that Best Brews's earnings per share and dividend per share will grow at a rate of 8% a year. The rate of return required by investors has been estimated at 10% per annum. Estimate the present value of the share.

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