ss Venture capital required rate of return. Blue Angel Investors has a success ratio of 10% with its venture funding.Blue Angel requires a rate of return of 21.7% for its portfolio of lending, and the average length on its loans is 5 years.If you were to apply to Blue Angel for a $108,000 loan, what is the annual percentage rate you would have to pay forthis loan?What is the annual percentage rate for the loan?% (Round to four decimal places.)

The rate of interest on a loan is determined by the amount borrowed and the amount repaid at the end…

Answered: Wenture capital required rate of…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Your firm is considering a one-year loan for $522,000. The fees are 2% of the loan amount and the interest rate is 4.3%. First, compute the net amount of funds from the loan. Based on this net amount, what is the true interest rate of the loan? Group of answer choices
Suppose a borrower, Syarikat ABC, has a 5-year, RM 10 million loan from Maybank.• Maybank charges an interest based on 6-month KLIBOR + 2% payable semi-annually.• The firm’s funding costs will increase as 6-month KLIBOR rises. How can the firmhedge?
Using Excel Please show how to solve this step by step to answer questions A. B. C. and D. The Green Bank originates a pool of containing 100 30-year fixed-rate mortgages with loan amount of $250,000 each. All mortgages in the pool carry a rate of 6.5% with monthly payments. The servicing fee is 0.05% each month. The Green Bank would like to sell the pool to investors via IO/PO Strips. Suppose that they issue 150,000 shares of IO/PO Strips and the market interest rate is 6%. A. Assume that there are no prepayment and no default, how much an investor would like to pay for each share of the IO/PO Strips? B. What is the price of each share of the IO/PO Strips if there are a constant prepayment rate of 1.5% every month and no default? C. What is the price of each share of the IO/PO Strips if there are a constant default rate of 1.5% every month (assuming the recovering rate is 50%) and no prepayment? D. Please explain your findings.
You have been assigned to estimate the interest rates that your company may have to pay when borrowing money in the near future. The following information is available.kPR = 2%MR = 0.1% for a 1 year loan increasing by 0.1% for each additional yearLR = 0.05% for a 1 year loan increasing by 0.05% for each additional yearDR = 0 for a 1 year loan, 0.2% for a 2-year loan, increasing 0.1% for each additional yearExpected Inflation Rates Year 1 = 7% Year 2 = 5% Year 3 and thereafter = 3% a. Calculate the inflation adjustment (INFL) for a 5-year loan. b. Calculate the appropriate interest rate for a 5-year loan.
You need a loan in the amount of $10,000 with a repayment period of 5 years. You did some market research, and it seems that you have two options as follows: Pay $3,000 per year at BMO or Pay 15,000at the end of the 5-year period at CIBC. What option is better. The interest/discount rate is 10% at both banks.
Suppose Capital One is advertising a 60-month,5.85% APR motorcycle loan. If you need to borrow $7,100 to purchase your dream Harley-Davidson, what will be your monthly payment? (Note: Be careful not to round any intermediate steps less than six decimal places.)
Your firm is considering a one-year loan for $522,000. The fees are 2% of the loan amount and the interest rate is 4.3%. First, compute the net amount of funds from the loan. Based on this net amount, what is the true interest rate of the loan?
Suppose Capital One is advertising a 60-month, 5.08% APR motorcycle loan. If you need to borrow $9,500 to purchase your dream Harley-Davidson, what will be your monthly payment? (Note: Be careful not to round any intermediate steps less than six decimal places.)
Bank Beta offers a car loan at 16.25% APR, compounded quarterly. What is the Effective Annual Rate (EAR) on the loan? A savings & loans agency is willing to offer a trader a loan of GH¢1,000 at 3.25% per month for a period of 1 year. What is the EAR At the rate of 8.54%, how long will an expected value of GH¢1,000 be if an investment value of GH¢129 is offered today ? How long will it take for GH¢300 to grow to GH¢1,500 at the interest rate specified? 4 percent 8 percent 16 percent Would you rather receive GH¢1,000 a year for 10 years or GH¢800 a year for 15 years if interest rate is 7 percent? interest rate is 18 percent? Why do your answers to (a) and (b) differ?
Suppose Capital One is advertising a 60-month, 5.66% APR motorcycle loan. If you need to borrow $7,200 to purchase your dream Harley-Davidson, what will your monthly payment be? (Be careful not to round any intemediate steps less than six decimal places)
Your firm is considering two one-year loan options for a $506,000 loan. The first carries fees of 2.4% of the loan amount and charges interest of 3.6% of the loan amount. The other carries fees of 1.8% of the loan amount and charges interest of 4.7% of the loan amount. a. What is the net amount of funds from each loan? b. Based on the net amount of funds, what is the true interest rate of each loan?
Time value of money practice problems. How would you solve these using a financial calculator? What values would you enter for N, I/YR, PV, PMT, and FV ? *assume coporate bonds pay 2x annually and have a FV on $1000 a) Calculate the FV of depositing $4,000 for each of the next 10 years earning 8%.

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