yilunzhao/KnowledgeMath huggingface dataset:
Topic: Asset Classes & Derivatives

Using the identical information below and the same perpetual growth model, if a trader uses the mean value of the dividend growth rate between 2004 and 2009, along with the sustainable growth rate for 2009 to predict growth, and if the trader's required return is at 15 percent, what would be the anticipated value of the enterprise's common shares?

| Year | EPS  | DPS  | ROE |
|------|------|------|-----|
| 2009 | $3.20| $1.92| 12% |
| 2008 | $3.60| $1.85| 17% |
| 2007 | $2.44| $1.74| 13% |
| 2006 | $2.08| $1.62| 15% |
| 2005 | $2.76| $1.35| 11% |
| 2004 | $2.25| $1.25| 9%  |
Topic: Accounting

The following information pertains to a patent owned by TDC Corporation. If we use the units-of-production depreciation method, what will be the first year's amortization cost?

|  |  |
|---|---|
| Acquisition cost | $60,000,000 |
| Acquisition date | 1 January 2012 |
| Patent expiration date | 31 December 2017 |
| Total plant capacity of patented product | 60,000 units per year |
| Production of patented product in fiscal year ended 31 December 2012 | 25,000 units |
| Expected production of patented product during life of the patent | 225,000 units |
Topic: Asset Classes & Derivatives

Marie, the portfolio manager of BC pension, is currently contemplating on incorporating NY Inc. (New York Stock Exchange: NY) into her portfolio. After a thorough evaluation of the company and its competition, she discerns that the company's growth rate steadily decreases from 12 percent in the initial year to 6 percent in year five. The total dividends paid by NY in 2017 amounted to $0.22. The required return is calculated to be at 9 percent. What is the stock's inherent worth?
Topic: Asset Classes & Derivatives

XYZ is a firm that trades in derivatives. This firm offloaded a five-year CDS protection on Firm E worth $10 million. The duration of this CDS contract is 3.5 years. After a quarter of a year, the credit spread on Firm E diminished from 225bps to 165 bps. Based on the details provided, how much profit can be expected if XYZ establishes a counterbalancing position?
Topic: Asset Classes & Derivatives

Due to marketing consumer staples, Bayside Essentials (BE) is capable of utilizing significant debt in its capital structure; in particular, 90 percent of the company's total assets of $450,000,000 are financed with debt capital. Its debt costs are 8 percent before taxes, and its equity capital costs are 12 percent. BE attained a pretax income of $5.1 million in 2006 and was taxed at a rate of 40 percent. What was BE's residual income?
Topic: Asset Classes & Derivatives

A pension fund manager from Canada is trying to gauge the impact of changes in market interest rates on his pension obligations. He calculates the present value of these obligations under three potential interest rate circumstances: a foundational rate of 7%, a rate boosted by 100 basis points to 8%, and a rate lowered by 100 basis points to 6%. Based on the analysis outcomes provided below, what is the effective duration of the liabilities of the pension fund?

| Interest Rate Assumption | Present Value of Liabilities |
|-------------------------|-------------------------------|
| 6%                      | CAD 510.1 million           |
| 7%                      | CAD 455.4 million           |
| 8%                      | CAD 373.6 million           |
Topic: Asset Classes & Derivatives

In his discussion about pathwise valuations being an alternative way of valuing bonds through a binomial interest rate tree, Thompson describes how Peterson uses the binomial interest rate tree to predict the potential interest rate paths for Bond M shown in Exhibit 9. Referencing Exhibits 6 and 9, what's the current value of Bond M's cash flows along Path 2?

| Path | Time 0 | Time 1 | Time 2 |
|------|--------|--------|--------|
| 1    | 1.500% | 2.8853%| 2.7183%|
| 2    | 1.500  | 2.8853 | 1.6487 |
| 3    | 1.500  | 1.7500 | 1.6487 |
| 4    | 1.500  | 1.7500 | 1.0000 |

| Bond   | Maturity | Coupon Rate |
|--------|----------|-------------|
| Bond C | 2 years  | 2.5%        |
| Bond D | 3 years  | 3.0%        |
Topic: Portfolio Management & Strategy

What is the 2012 return required to realize a trailing five-year geometric mean annualized return of 5% at the conclusion of 2012 for a wealth management company that produced the following annual returns in their US large-cap equity portfolio?


| Year | Net Return (%) |
|------|----------------|
| 2008 | -34.8          |
| 2009 | 32.2           |
| 2010 | 11.1           |
| 2011 | -1.4           |
Topic: Accounting

Based on the financial records of Corporation X provided, what is the quantity of cash disbursed to vendors in 2017?

|                        | Income Statement | Balance Sheet Changes                               |
|------------------------|------------------|-----------------------------------------------------|
| Revenue                | $22,100          | accounts receivable +$550<br> inventory -131<br> prepaid expense +6<br> accounts payable +1,230   |
| Cost of goods sold     | $16,230          |                                                     |
| Other operating expense| $508             |                                                     |
| Depreciation expense   | $1,500           |                                                     |
Topic: Accounting

What is the financial leverage ratio for SAP Group on December 31, 2017, based on the data provided in the Exhibit?

| Assets                           | 31 Dec 2017 | 31 Dec 2016 |
|----------------------------------|-------------|-------------|
| Total current assets             | 11,930      | 11,564      |
| Total non-current assets         | 30,567      | 32,713      |
| Total assets                     | 42,497      | 44,277      |
| Total current liabilities        | 10,210      | 9,674       |
| Total non-current liabilities    | 6,747       | 8,205       |
| Total liabilities                | 16,958      | 17,880      |
| Issued capital                   | 1,229       | 1,229       |
| Share premium                    | 570         | 599         |
| Retained earnings                | 24,794      | 22,302      |
| Other components of equity       | 508         | 3,346       |
| Treasury shares                  | (1,591)     | (1,099)     |
| Equity attributable to owners of parent | 25,509  | 26,376  |
| Non-controlling interests        | 31          | 21          |
| Total equity                     | 25,540      | 26,397      |
| Total equity and liabilities     | £42,497     | £44,277     |
Topic: Risk Management

Currently, XYZ is rated A in terms of credit and has issued two-year zero-coupon bonds. The market anticipates that the company will either maintain its A rating, be downgraded to BBB, or upgraded to AA in the span of a year with chances of 85%, 10%, and 5%, respectively. Presuming a flat risk-free yield curve with a 1% value, and credit spreads of 70, 100 and 300 basis points for the AA, A, and BBB ratings respectively, with all interest rates compounding annually, what is the predicted worth of a zero-coupon bond after a year?
Topic: Portfolio Management & Strategy

What is the reported historical geometric returns for the real rate of return for equities according to the expert?

| Asset Class     | Geometric Return(%) |
| --------------  | ------------------- |
| Equities        | 8.0                 |
| Corporate Bonds | 6.5                 |
| Treasury bills  | 2.5                 |
| Inflation       | 2.1                 |
Topic: Quantitative Analysis & Valuation

Analyst John has compiled the following data for the return on the market and the return on Crude Oil. Can you compute the covariance of returns between the market and Crude Oil? Probability Matrix

| | Roil =30% | Roil=15% | Roil=10% |
| - | - | - | - |
| RMkt=25% | 30% | 0 | 0 |
| RMkt=20% | 0 | 40% | 0 |
| RMkt=0% | 0 | 0 | 30% |
Topic: Quantitative Analysis & Valuation

Assuming that there's a 0.4 chance of a strong economy and a 0.6 chance of a weak economy. The table below shows the conditional probabilities of product Z's profit. What will be the anticipated profit of product Z?

| Hi | P(Hi|Good) | P(Hi|Poor) |
|---|------------|------------|
| 0 | 0.1           | 0.5            |
| 10 | 0.3           | 0.3            |
| 20 | 0.6           | 0.2            |
Topic: Risk Management

A portfolio is made up of options on Apple and Verizon. The Apple options have a delta of 1000, while the Verizon options have a delta of 20000. The share price of Apple is $120, and Verizon's share price is $30. If we assume that the daily volatility of Apple is 2% and the daily volatility of Verizon is 1%, and the correlation between the daily changes is 0.3, what is the 5-day 95% VaR?
Topic: Asset Classes & Derivatives

As per the financial report, what is the FCFE for Company N?

| CompanyM            | $(millions) |
|---------------------|-------------|
| Operating income (EBIT) | 2,000       |
| Depreciation expense     | 750         |
| Interest expense         | 300         |
| Increase in accounts receivable | 1,000   |
| Increase in inventories  | 100         |
| Increase in accounts payable | 500     |
| Purchases of PP&E        | 600         |
| Borrowing (repayment)    | 400         |
| Tax rate                 | 30%         |
Topic: Quantitative Analysis & Valuation

According to the data table providing details about three bonds with twice-yearly coupon payments, what is the discount factor for d(1)?

| Maturity | Coupon | Price |
|---|---|---|
| 6 months | 4.5% | 101.47 |
| 1 year | 6.0% | 102.75 |
| 2 years | 7.0% | 100.32 |
Topic: Asset Classes & Derivatives

If Johnson collects data on spot rates for current annual-coupon government bonds and swap spreads, as shown in the Exhibit below, and purchased a government bond, he would receive an almost risk-free annualized return. According to the no-arbitrage principle, what could Johnson demonstrate the forward price of a one-year government bond, set to be issued in one year, to be?

|                    | Maturity (Years) |     |     |     |
|--------------------|------------------|-----|-----|-----|
|                    | 1                | 2   | 3   | 4   |
| Government spot rate | 2.25%           | 2.70% | 3.30% | 4.05% |
| Swap spread        | 0.25%           | 0.30% | 0.45% | 0.70% |
Topic: Portfolio Management & Strategy

Several months down the line, Jordan gets a phone call from Fatimah. She has now become a board member of the Polar Foundation for Medical Advancements (PFMA). PFMA was created to fund a range of medical research endeavors. Fatimah is thrilled and requests Jordan to work out the return objective of PFMA's portfolio. Kyoto points out the following:• PFMA’s main investment goal is to preserve the real purchasing power of its portfolio after distributions.• The risk-free rate is 4.0%.• An expected inflation rate is 3.5%.• The portfolio’s standard deviation is 15.0%.• The cost of earning investment returns is 50 bp.• PFMA aims for a 5.5% annual distribution of assets. What is PFMA’s return objective?
Topic: Risk Management

We have a bond assortment containing two bonds, namely bond X and bond Y. The worth of bond X is $60 million, while bond Y is worth $40 million. The one-year default probability for bond X is 5% with a recovery rate of 60%, whereas bond Y has a default probability of 7% and a recovery rate of 50%. Determine the anticipated credit loss for this collection over one year, given that the likelihood of both bonds defaulting is 0.7% and the default relationship is observed to be 20%.
Topic: Asset Classes & Derivatives

What is the per share value of REIT B when the net asset value valuation method is applied?

|                                               | REIT A        |
|-----------------------------------------------|---------------|
| Estimated 12 months cash net operating income (NOI) | $ 280,000    |
| Cash and equivalents                          | $ 335,000    |
| Accounts receivable                           | $ 230,000    |
| Debt and other liabilities                    | $ 1,680,000  |
|                                               |               |
| Shares outstanding                            | 82,000       |
| Assumed cap rate                              | 8.00%        |
Topic: Accounting

The educational firm based in China, company PZ, operates under IFRS. In 2018, it had a passive equity ownership interest of 15% in the T-internet company. By the close of 2018, PZ decided to increase its ownership to 50% as of 1st January 2019, via a cash purchase. There have been no transactions between companies. In the table containing financial statements for both companies that follows: Could you determine the total liabilities for company PZ under the proportionate consolidation method for 2019?

|                      | 2018 | 2019 |
|----------------------|------|------|
| Revenue              | 5000 | 7000 |
| Cost                 | 2000 | 2300 |
| Operating income     | 3000 | 4700 |
| Net profit           | 1650 | 2300 |
| Total assets         | 4000 | 6000 |
| Total liabilities    | 1200 | 900  |
| Equity               | 2800 | 5100 |

|                        | 2018  | 2019  |
| ---------------------- | ----  | ----  |
| Revenue                | 2000  | 2500  |
| Cost                   | 1200  | 1300  |
| Operating income       | 800   | 1200  |
| Net profit             | 460   | 820   |
| Dividends paid         | 230   | 410   |
| Total assets           | 1000  | 1100  |
| Total liabilities      | 600   | 650   |
| Equity                 | 400   | 450   |
Topic: Quantitative Analysis & Valuation

A risk analyst calculates daily variance hth_tht​ using a GARCH method on daily yield rt:ht=α0 +α1rt−12+βht−1, with α0=0.005,α1 =0.04,β=0.94r_t:h_t=\alpha_0\;+\alpha_1r_{t-1}^2+\beta h_{t-1},\;with\;\alpha_0=0.005,α1\;=0.04,\beta=0.94rt​:ht​=α0​+α1​rt−12​+βht−1​,withα0​=0.005,α1​=0.04,β=0.94. The long-term annual volatility is roughly.
Topic: Accounting

P-tech Corporation, adheres to US GAAP and has been growing by purchasing other web-based businesses, the biggest of which is Surge web business. Currently, P-tech Corporation is establishing a 50/50 joint venture with Bravo company where they will together govern Surge web business. P-tech's accounting strategy for the joint venture will employ the equity method. Bravo company, complying with IFRS, will apply the proportionate consolidation method for their joint venture accounting. Joseph, a CFA, is an employee at Investment Equity Corp, and he has predicted the financial specifics for the joint venture in 2012. Joseph is making his approximations regarding each company’s profits and overall financial performance. In light of Joseph's projections, what will the Surge web business's total asset (in ￥ millions) be at the end of 2012, as noted in the chart below, that Bravo company will include in their consolidated financial statements?

| Year ending 31 December | 2012 |
|-------------------------|------|
| Revenue                | 2,230|
| Operating income       | 322  |
| Net income             | 102  |
| Total assets           | 2,100|
| Shareholders' equity   | 950  |
Topic: Market Analysis & Economics

The following calculations have been derived for XYZ Inc.: Demand curve: P = 150 – 5 × Q Total revenue curve: TR = 150 × Q – 5 × Q2 Marginal revenue curve: MR = 150 – 10 × Q Total cost curve: TC = Q3 – 10 × Q2 + 73 × Q + 120 Average cost curve: AC = Q2 – 10 × Q + 73 + 120/Q Marginal cost curve: MC = 3 × Q2 – 20 × Q + 73 P stands for price per unit, and Q stands for cost per unit. What output (in units) will maximize the profit for XYZ Inc.?
Topic: Quantitative Analysis & Valuation

A researcher is analyzing a collection that includes 2,500 non-prime mortgages and 800 prime home loans. Out of the non-prime mortgages, 500 are delayed in their payments. Out of the prime home loans, 64 are delayed in their payments. If the researcher randomly picks a home loan from the collection and it is presently delayed on its payments, what is the likelihood that it is a non-prime mortgage?
Topic: Asset Classes & Derivatives

There were no additions to or subtractions from the portfolio during the year. Fees for administration are determined by the value at the end of the period. The fees for administration and incentive are computed separately. What's the return after deductions for the client given the following details: Starting portfolio assets valued at $100M, portfolio assets at the period's close (prior to fee deductions) amounting to $110M, a management fee pegged to the assets under management at 2%, an incentive fee based on the gains of 20%, and a soft hurdle rate of 8%?
Topic: Quantitative Analysis & Valuation

Conservative Fund that has USD 50 million in assets has been performing poorly recently, prompting the institutional sales team to suggest a merger with Assertive Fund, a larger fund valued at USD 200 million. Conservative Fund's returns are usually distributed with an average of 3% and a standard deviation of 7%. As for Assertive Fund, its returns follow a normal distribution with an average of 7% and a standard deviation of 15%. The top executives have tasked a financial analyst to calculate the possibility that the returns on the merged portfolio might surpass 26%. Given that the returns on both funds don't influence each other, how would the analyst estimate the chances of the returns on the merged fund exceeding 26%?
Topic: Asset Classes & Derivatives

Based on the data provided in the subsequent table, what is the sustainable growth of Company N?

|     | Financial Statement of Company M ($ million) |
| --- | -------------------------------------------- |
| Net income | 4,500 |
| Sales | 40,000 |
| Total assets, average during year | 50,020 |
| Shareholders' equity, beginning of year | 39,080 |
| Dividends paid | 200 |
Topic: Accounting

A firm adhering to International Financial Reporting Standards (IFRS) doesn't apply the cost model when valuing its investment properties and property, plant, and equipment. Data regarding an investment property and a plant are provided below: The firm will probably record a profit (in thousands) on its income statement for the year of:

|         | Beginning of the Year (C thousands) | End of the Year ( thousands) |
|---------|------------------------------------|------------------------------|
| Investment property | 1,000                            | 1,100                        |
| Plant    | 1,000                            | 1,200                        |
Topic: Market Analysis & Economics

A financier from Australia presently owns an equity portfolio worth A$240 million. He's contemplating adjusting the portfolio depending on the evaluation of the risk and return potential concerning the Australian economy. The details associated with the Australian investment markets and economy have all been compiled in this table: Utilizing the data in the table and the Grinold-Kroner model, what is the anticipated yearly equity risk premium?

| 10-Year Historical | | Current | Capital Market Expectations |
| :---: | :---: | :---: | :---: |
| **Average government bond yield:** 2.8% | | 10-year government bond yield: 2.3% |  |
| **Average annual equity return:** 4.6% | | Year-over-year equity return: -9.4% |  |
| **Average annual inflation rate:** 2.3% | | Year-over-year inflation rate:  2.1% | Expected annual inflation: 2.3% |
| **Equity market P/E (beginning of period):** 15x | | Current equity market P/E: 14.5x | Expected equity market P / E: 14.0x |
| **Average annual dividend income return:** 2.6% | |  | Expected annual income return: 2.4% |
| **Average annual real earnings growth:** 6.0% | | |Expected annual real earnings growth:  5.0% |
Topic: Accounting

The education company ZP, which is based in China and follows IFRS, had a passive equity interest of 15% in U-web company in 2018. ZP decided to bump up its ownership interest to 50% at the beginning of 2019 through a cash purchase. Both companies have no intercompany transactions. The financial data for ZP and U-web companies are provided in the table below. Could you compute the net income of ZP company for 2019 assuming a significant influence over U-web company?

|                            |   2018 |   2019 |
|----------------------------|--------|--------|
| Revenue                    | 5,000  | 7,000  |
| Cost                       | 2,000  | 2,300  |
| Operating income           | 3,000  | 4,700  |
| Net profit                 | 1,650  | 2,300  |
| Total assets               | 4,000  | 6,000  |
| Total liabilities          | 1,200  | 900    |
| Equity                     | 2,800  | 5,100  |

|                       | 2018 | 2019 |
|-----------------------|------|------|
| Revenue               | 2000 | 2500 |
| Cost                  | 1200 | 1300 |
| Operating income      | 800  | 1200 |
| Net profit            | 460  | 820  |
| Dividends paid        | 230  | 410  |
| Total assets          | 1000 | 1100 |
| Total liabilities     | 600  | 650  |
| Equity                | 400  | 450  |
Topic: Asset Classes & Derivatives

Based on the provided information, what is the EBITDA interest coverage ratio of company B?

|                                         |            |
|-----------------------------------------|------------|
| Exhibit 1. Company A Excerpt from Consolidated Income Statement Year|            |       
| Ending 31 December 2013 ($ in millions) |            |       
| Gross profit                            |6,290       |     
| Royalty and commission income            |130         |      
| Other operating income                   |140         |      
| Other operating expenses                 |4,985       |      
| Operating profit                         |906         |      
| Interest income                          |37          |      
| Interest expense                         |135         |      
| Income before taxes                      |988         |      
| Income taxes                             |257         |      
| Net income                               |692         |      
| Additional Information:                  |            |
| Depreciation and amortization:  $264 million |264     |
Topic: Market Analysis & Economics

Finally, David concentrates on predicting the anticipated returns from direct real estate investments. He reviews a decade's worth of data on returns from multifamily residential real estate. David doubts whether the fluctuations in the observed returns indicate smoothing. He applies a publicly available REIT index to eliminate the smoothing effect on the return flow and accurately represent the risk (gauge by standard deviation) related to multifamily residential real estate investment (the REIT index's variance for the measurement duration is 16; λ is 0.8). What is David’s adjusted standard deviation for multifamily properties for the investment duration?
Topic: Market Analysis & Economics

A researcher at a property investment company is trying to set predictions for the return rate of industrial properties for the upcoming year. He has gathered the following information: Calculate the anticipated return from the industrial sector properties based on the data presented.

| Current industrial sector capitalization rate ("cap" rate) | 5.7% |
|-----------------------------------------------------------|-----|
| Expected cap rate at the end of the period                | 5.5% |
| NOI growth rate (real)                                    | 1%   |
| Inflation expectation                                     | 1.5% |