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An investor has the opportunity to buy a long-term sub-lease contract that calls for 20 semi-annual payments of $18,000 each. Payments on the sub-lease are to be made at the beginning of each semi- annual period, commencing on the date that the leasehold interest is purchased. The investor desires a minimum yield of 6% per annum, compounded annually. 7. What type of annuity is described by the above facts? (1) Ordinary simple annuity (2) General annuity due (3) Simple annuity due (4) Ordinary general annuity

An investor has the opportunity to buy a long-term sub-lease contract that calls for 20 semi-annual payments of $18,000 each. Payments on the sub-lease are to be made at the beginning of each semi- annual period, commencing on the date that the leasehold interest is purchased. The investor desires a minimum yield of 6% per annum, compounded annually. 7. What type of annuity is described by the above facts? (1) Ordinary simple annuity (2) General annuity due (3) Simple annuity due (4) Ordinary general annuity

Essentials Of Investments
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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An investor has the opportunity to buy a long-term sub-lease contract that calls for 20 semi-annual payments of $18,000 each. Payments on the sub-lease are to be made at the beginning of each semi- annual period, commencing on the date that the leasehold interest is purchased. The investor desires a minimum yield of 6% per annum, compounded annually. 7. What type of annuity is described by the above facts? (1) Ordinary simple annuity (2) General annuity due (3) Simple annuity due (4) Ordinary general annuity
Transcribed Image Text:An investor has the opportunity to buy a long-term sub-lease contract that calls for 20 semi-annual payments of $18,000 each. Payments on the sub-lease are to be made at the beginning of each semi- annual period, commencing on the date that the leasehold interest is purchased. The investor desires a minimum yield of 6% per annum, compounded annually. 7. What type of annuity is described by the above facts? (1) Ordinary simple annuity (2) General annuity due (3) Simple annuity due (4) Ordinary general annuity
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