A fixed coupon bond with 20 years to maturity has a coupon rate of 7%, with payments made annually.  What is the price the company would expect to see for this bond if it expects the yield to be 9%?   * Draw a timeline of show all cashflows for this bond.  Submit the timeline with your hand-written work. *

Please take a photo/PDF of your hand-written work and submit it here.  Your work will be graded.  Please write your name at the top of the submission and make sure the problems are clearly labeled.   If you have more than one page, you will likely have to submit one page here and one page on the next “question.” Thank you!

Please take a photo/PDF of your hand-written work and submit it here.  Your work will be graded.  Upload your work, do not email it. Failing to submit your written work will result in partial credit at best.   Thank you!

ABC Corporation just announced a 2-for-1 stock split.  Prior to the split the company had a market value of $2.1 billion with 30 million shares outstanding.  The split conveys no new information about the ABC Corporation. To receive full credit or to earn partial credit, please do your work on the hand-written page.  (Submit with all your hand-written work as the last problem on the exam.)  Prior to the split, what was the price per share of ABCorporation stock? [a] What is the value of ABC Corporation after the split? [b] How many shares will be outstanding after the split? [c] What will the price per share be after the split? [d]

A fixed coupon corporate bond with 30 years to maturity has a price quote of 93.5, with payments made annually.  What coupon rate would a company expect for this bond if you expect the yield to be about 8.5%? (hint – Assume the quote should be used as percentage of par.  You do not need to consider this bond as quoted in 8ths)  * Please show your work clearly on your hand-written page.  Partial credit will be given if I can follow your work. *  

FAB-u-less BANK currently has $10 million in deposits and holds $500,000 in excess reserves.  A new customer comes along with a fabulous new deposit of $75,000.  Assuming that the bank policy is to hold a total of 13% of deposits in the form of reserves. [a] Calculate the excess reserve ratio: [b] Calculate the required reserve ratio:  [c] How much would the bank required reserves increase on the new deposit? To receive full credit or to earn partial credit, please do your work on the hand-written page.  (Submit with all your hand-written work as the last problem on the exam.)   

Explain the importance of the Gramm-Leach-Bliley Financial Services Modernization Act of 1994 when considering factors that lead up to the Financial Crisis of 2008.  Be specific in your answer.

SUPERBANK has a required reserve ratio of 8%.  The bank holds no excess reserves and required reserves are currently $34 million.  If the bank has an outflow of deposits of $6 million dollars, the bank will have a reserve shortage.    Calculate the dollar amount of the reserves shortage: Do your work on a blank piece of paper.  You will upload this work along with a balance sheet as part of the final question of this exam.

Complete the following loan amortization by hand.  Please draw a table like the one below on your blank page and fill in each blank. You will take a picture of this chart and upload your completed chart at the end of the exam. Please show your work. Please do not forget to calculate the total finance (interest) charge for this loan.  You should enter the total interest (finance) charge in the blank prompt for this question.   You are considering purchasing a house for $295,000.  Do a three month loan amortization and calculate total finance charge.  Assume a 20 % down payment.   (This loan requires a 20% down payment and you will be required to make monthly payments.)   20 year 6.00% loan with one and a half discount points.   Beginning Balance Payment Principle Interest Ending Balance                                       FILL IN THE BLANK FOR          Total finance charge:_____________________

6) Pair production releases a proton and an electron.