FIN 534

3. Assume you purchased a bond for $9,186. The bond pays $300 interest every six months. You sell the bond after 18 months for $10,000. Calculate the following: a. Income. b. Capital gain (or loss). c. Total return in dollars and as a percentage of the original investment. Review Only Click the icon to see the Worked Solution. a. The current income is $ (Round to the nearest dollar.) b. The capital gain (or loss) is $ (Enter a loss as a negative number and round to the nearest dollar.) c. The total return in dollars is $ (Round to the nearest dollar.) The total return as a percentage of the original investment is %. (Enter as a percentage and round to two decimal places.)

The current income is ? The investor would experience a Gain, Loss, or Neither? The total return on this investment is ​$?

Assume you have the following asset and liability in your Balance Sheet: Asset - Bond A Modified Duration = 2.6 years Value = RM1.5 million Liability - Bond B Modified Duration = 3.1 years Value = RM1.0 million a. Calculate the duration gap.  b. What is the expected change in Net Worth if interest increases by 1%? Assume previous interest is 10% c. What should or could you to achieve immunised balance sheet?  Note: Please show all workings.

Solve this question with steps please. The subject is financial management.

Assume you have the following asset and liability in your Balance Sheet: Asset - Bond A Modified Duration = 2.6 years Value = RM1.5 million Liability - Bond B Modified Duration = 3.1 years Value = RM1.0 million a. Calculate the duration gap.  b. What is the expected change in Net Worth if interest increases by 1%?  c. What should or could you to achieve immunised balance sheet?  Note: Please show all workings.

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uestion 1: Solve the following TVM problems using Excel formulas. You MUST use Excel formulas (FV or PV) to receive credit. ou can assume that all payments are made at the beginning of the period and use "1" for the "type" argument in the formula. A. Suppose you invest 11,400 today. What is the future value of the investment in 29 years, if interest at 7% is compounded annually? B. Suppose you invest $ 11,400 today. What is the future value of the investment in 29 years, if interest at 7% is compounded quarterly? C. Suppose you invest $ 570 monthly. What is the future value of the investment in 29 29 years, if interest at + 5% is compounded monthly? 5 6 7 8 19 20 21 22 23 24 25 26 27 28 29 Question 1 Question 2 + Ready Accessibility: Investigate MAR 17 A 国 W X

Exercise 2. Using the situations provided in Exercise 1, compute the annual interest, total interest and amount to be received or paid at the end of the term of each scenario using a compound interest ass 1. You invested P28,000 in govemment securities that yields 5% annually for three years. 2. Your mother obtained a car loan for P900,000 with an annual rate of 12% for 5 years. 3. You deposited P10,000 from the savings of your daily allowance in a time deposit account with your savings bank at a rate of 1.5% per annum. This will mature in 6 months assumption.

Provide step by step manula solution, formula, and diagram.  An investor have a projected surplus income of P1000 per year which he plans to place in a bank which offers an interest of 18% per annum for time deposit over 5 years. Compute how much shall the investor collect at the end of 13 years

What is the present worth of a future payment of $19,000 in year 7 if the interest rate is 10% per year using (a) the tabulated factor values in your book, (b) TVM functions on a financial calculator, and (c) built-in functions on a spreadsheet?

5. Present value To find the present value of a cash flow expected to be paid or received in the future, you will the future value cash flow by (1+1)N What is the value today of a $42, 000 cash flow expected to be received 17 years from now based on an annual interest rate of 7% ? $13,296 $10,637 $132, 670 $20, 609 Your broker called carfier today and offered you the opportunity to invest in a security. As a friend, he suggested that you compare the current, or present value, cost of the security and the discounted value of its expected future cash flows before deciding whether or not to invest. The decision rule that should be used to decide whether or not to invest should be. Everything else being equal, you should invest if the discounted value of the security's expected future cash flows is greater than or equal to the current cost of the security. Everything else being equal, you should invest if the current cost of the security is greater than the present value of the security's…

Overview In this activity, you will complete calculations and research that will help you understand how to evaluate the return and risk on investments. Instructions Answer these questions: You have just won the Strayer Lottery jackpot of $11,000,000. You will be paid in twenty-six equal annual installments beginning immediately. If you had the money now, you could invest it in an account with a quoted annual interest rate of 9% with monthly compounding of interest. Calculate the present value of the payments you will receive. Show your calculations using formulas in your paper or in an attached spreadsheet file. Explain why there is a difference between the present value of the Strayer lottery jackpot and the future value of the twenty-six annual payments based on your calculations and the information provided. Discuss the risk and return indicated by different bond ratings. Support your answer with references to your research. Use various bond websites to locate one of each of…

What is that promise worth today on this accounting question?

What would be the capital gain or loss for this general accounting question ?

What is that promise worth today on this accounting question? Do fast answer

Part B: Calculate FV or PV for the following questions and put all in the format uploaded in the Moodle: (Put any number you want in the empty places and then calculate)

Problem 3 (a) If Daniella opens a mutual fund account with a deposit of $15,000 and it promises to pay an annual interest rate of r%, compounded on a monthly basis. (i) Derive a function B, which shows the balance on Daniella's account the end of 6 years. (ii) Make a comparison of the rates of change in B with resect to the interest rate when r is 8% , 10% and 12%.

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 b) What is the PV of a 20-year corporate bond issued 5 years ago paying a 5% interest rate when similar bonds today pay 4.5%?

Assume you have the following asset and liability in your balance sheet Asset - Bond AModified Duration = 1.5 yearsValue = RM1 million Liability - Bond BModified Duration 2.6 yearsValue = RM2 million a. Calculate the duration gaps?b. What is the expected change in Net worth if interest increases by 1%?c. What should or could you to achieve immunised balance sheet?

Answer the questions below and show all working from a financial calculator. Do not use excel: 1. A security pays you an annual amount of $900 for 10 years. The seller of the security requires the first payment to be made today and the last payment to be made 9 years from today. Interest rate on this security is 5.75 percent per annum. Calculate the present value rounded to 2 decimal places. 2. What will be the present value, if $5,400 is discounted back 4 years at an interest rate of 3% compounded semi-annually?

For questions below, make sure to write down the formulas you use and explain your calculations. 1. Suppose you take out a fixed payment loan of £1000 for 5 years. You will repay it in annual installments. Calculate the fixed payment if you know the interest on the loan is 5%. 2. Suppose you require a 10% return on your investments while purchasing a stock that is currently trading at $50. The company is believed to pay out dividends of $5 per share in the next two years. What is the lowest value of expected stock price 2 years from now that would make you willing to purchase the stock asuming you want to sell it at that time? Calculate the yield-to-maturity on a coupon bond that has a 5% annual coupon rate and face value F = $100 due in 2 years from now if the bond is currently traded at price $105. 3. Suppose the current 1-year discount rate on US government bonds is 3% and the 2- year rate is at 6%. What is the implied expected 1-year rate next year, assuming the expectations 4.…

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PROBLEM (1-4) (A) If you want to have $250 in 5 years and you can earn an annual return of 7%, how much must you invest today? Be sure to use cell references and make sure that your answer appears as a positive value. (B) If you make a one-time deposit today of $800 you can earn 10% per year, how much would you have in your account after 15 years? Be sure to use cell references and remember that deposits from you are outflows. (C) If your investment of $1,254 declined to $435 in 6 years, what compounded annual rate of return would you have earned? Be sure to use cell references and to convert your answer to a percent rounded to two places after the decimal point. (D) If you can earn 5% per year, precisely how many years would it take for your investment of $450 to turn into $1,200? Be sure to use cell references and display your answer rounded to two places after the decimal point. TIME VALUE OF MONEY: LUMP SUMS PV FV r n (A) (B) (C) (D)

Problem ▪ You are considering investing $1,000 in a savings bond that will pay $1,210 in 2 years. What is the interest rate?

Give typing answer with explanation and conclusion    Find the interest rate (or rates of return) in each of the following situations. Do not round intermediate calculations. Round your answers to the nearest whole number.   You borrow $740 and promise to pay back $814 at the end of 1 year.   %   You lend $740 and receive a promise to be paid $814 at the end of 1 year.   %   You borrow $60,000 and promise to pay back $171,156 at the end of 8 years.   %   You borrow $11,000 and promise to make payments of $3,359.50 at the end of each of the next 5 years.   %

Determinants of Interest Rates Problem Illustration: (1 + nominal) 1 Solving for the Real Rate of Interest real (1 + inflation) You have managed to build up your savings over the three years following your graduation from college to a respectable P100,000 and are wondering how to invest it. Your banker says they could pay you 5% on your account for the next year. However, you recently saw on the news that the expected rate of inflation for next year is 3.5%. If you are earning a 5% annual rate of return but the prices of goods and services are rising at a rate of 3.5%, just how much additional buying power would you gain each year? Stated somewhat differently, what real rate of interest would you earn if you made the investment?

Suppose you purchase a T-bills that is 125 days from maturity for $9,765. The T-bills has a face value of $10,000.a. Calculate the T-bills’s quoted discount rate. b. Calculate the T-bills’s annualized rate.c. Who are the major issuers of and investors in money market securities?

Topic 2: Return measures2. Which of the following investments do you prefer?(a) Purchase a zero-coupon bond, which pays $1000 in ten years, for a price of $550.(b) Invest $550 for ten years in a bank savings account at a guaranteed annual interestrate of 5.5%.1

no. 12 1. An investor can invest money with a particular bank and earn a stated interest rate of 4.40%; however, interest will be compounded quarterly. Complete the following table by computing the nominal (or stated), periodic, and effective interest rates for this investment opportunity. Interest Rates Value Nominal rate      Periodic rate      Effective annual rate 2. Clancy needs a loan and is speaking to several lending agencies about their interest rates and loan terms. He particularly likes his local bank because he is being offered a nominal rate of 4.00%. However, since the bank is compounding its interest daily, the loan will impose an effective interest rate of ________ on his loan. 3.  Suppose you decide to deposit $15,000 into a savings account that pays a nominal rate of 5.20%, but interest is compounded daily. Based on a 365-day year, how much would you have in your account after six months? (Hint: To calculate the number of days, divide the number of…