Consuelo pays into an ordinary annuity for 40 years. a. If the annuity earns 5.4% yearly interest and her monthly payments are $150, how much does she have saved at the end of 40 years? b. If she wants to spend all her savings over the following 20 years, how much per month can she spend? That is, using the same interest rate, and starting from the balance you computed in part a, treat the account as a payout annuity to expire in 20 years. What is her monthly payout?
Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
11. Consuelo pays into an ordinary
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