a. Jawablah semua soal berikut.

Jawab diketik dan dikumpulkan paling lambat Senen 28 September

2015 jam 14.00 di PPAk
b.

Ingat semua bentuk kecurangan termasuk copy paste pekerjaan teman berakibat nilai akhir
saudara adalah E.

1.

Illustrate and explain how a convertible bond value is based on both debt and equity value. What is the
option value?

2.

Why are warrants and convertibles issued?

3.

The following data is used to answer question 3 and 4.

Assets
Overnight Money
1-year T-Bonds
Loans
Mortgages
Liabilities
Checking Accounts
Short-term CDs
Long-term CDs
Equity

Duration

Market Value

0.0
0.6
2,20
7.50

$3 Million
$8 Million
$20 Million
$8 Million

Duration
0.0
0.4
3.20

Market Value
$20 Million
$4 Million
$12 Million
$3 Million

Calculate the duration of Tiger State Bank's assets and liabilities

4. What new asset duration will immunize the balance sheet?
5.

Duration is defined as the weighted average time to maturity of a financial instrument. Explain how this
knowledge can help protect against interest rate risk.

6.

The futures markets are labeled as pure speculation and even gambling. Why is this an inaccurate portrayal
of the market's function?

7.

What is triangle arbitrage? Using the U.S. dollar, the Canadian dollar, and the euro, construct an example in
which triangle arbitrage exists, and then show how to exploit it.

8.

How well do you think relative purchasing power parity and uncovered interest parity behave? That is, do
you think it's possible to forecast the expected future spot exchange rate accurately? What complications
might you run into?

9.

What is required for absolute purchasing power parity to hold? Do you think absolute PPP would hold in the
case where a computer retailer in the U.S. sits directly across the border from a computer retailer in Canada?
How about Houston, Texas, and Winnipeg, Manitoba?

10. Describe the foreign currency and home currency approaches to capital budgeting. Which is better? Which
approach would you recommend a U.S. firm use? Justify your answer.
11. Are exchange rate changes between the U.S. dollar and the Japanese yen necessarily good or bad for
Japanese automakers? Explain your reasoning.
12. Information on shareholder's equity as currently shown on the books of the Eaton Corporation is
given as:
Common shares ($2.00 par value)
Capital in Excess of Par
Retained Earnings

$ 350,000
0
7,800,000

From this information, calculate Eaton's book value per share.

13. Based on the data on question 12, Rework the shareholder's equity as it appears on the
books if the company issues 40,000
new shares of common at $70 per share.
14. Preferred Stock, as a hybrid security, presents somewhat of a puzzle as to why they are issued. What
elements give rise to the puzzle and how is it explained?
15. Different countries have different sources of funds. For example, in the United States, internally generated
funds count for over 4/5 of all funds while in Japan, it is about '/2 with externally generated funds making up
the remainder. The disparities are less in the United Kingdom and Germany, with about 2/3 of funds coming
from internal sources. Discuss this disparity and why it might exist.