*If (P) is principal amount, (i) isthe rate of interest and (n) isthe number of periods inyears, then the interestfactor is:O All choicesO None of the choicesO (ni-1)O niO (1+ni)Spelmis

A "factor rate," often known as a "purchase rate," is a method of expressing interest on various…

Answered: * If (P) is principal amount, (i) is…

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 oil refinery finds that it is necessary to treat the waste liquids from a new process before discharging them into a stream. The treatment will cost $30,000 the first year, but process improvements will allow the costs alternative, an outside company will process the wastes for the fixed price of $15,000/year throughout the 15 year period, payable at the beginning of each year. Either way, there is no need to treat the wastes after 15 years. Use the annual worth method to determine how the wastes should be processed. The company's MARR is 12%. decline by $3,000 each year. As an Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. The AW of the in-house treatment is S (Round to the nearest dollar) The AW of the outside treatment is S (Round to the nearest dollar.) The processing is the most economical alternative
The present value of a single payment can be represented as ____. a. PV0 = FVn(PVIFi,n) b. PV0 = FVn(PVIFAi,n) c. PV0 = FVn[1/(1 - i)n] d. None of these are correct
If Po is the initial price of the security, P₁ is the price after you hold it for a year, and X represents a direct payment, an asset's rate of return is equal to: rate of return = (P₁ - Po) rate of return = (P₁ - Po) + X rate of return = (P₁-Po) / Po + XPo rate of return = (P₁ - Po)/Po + X
(Inflation and interest rates) Assume the expected inflation rate is 4.4 percent. If the current real rate of interest is 6.8 percent, what should the nominal rate of interest be? Question content area bottom Part 1 The nominal rate of interest should be enter your response here%. (Round to two decimal places.)
Hw 2
What is the interest rate?
e Mon] 2.3 The Time Value of Money Which of the following variables are required to compute the future value of a lump sum? O I, N, FV O PMT, FV, I PMT, FV, N O I, N, PV Save for Later JAN ottv
Q2: Suppose the current 1-year spot rate is 3% and the forward rate from time 1 to time 2 consistent with the current term structure of interest rates is 2%. Determine the 2-year discount factor from time 2 back to time 0.
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Question: Which of the following statement is WRONG? O dA "forward foreign exchange contract" is an agreement to exchange one currency for another on some date in the future at a price set now. O b. "Speculation" is taking an action to increase exposure to exchange rate risk. An international investment is "covered" if it is hedged. od. A person is exposed to exchange rate risk if the value of his/her income changes if exchange rates in the future change in ways that are not expected. e "Hedging" is taking an action to increase exposure to exchange rate risk.
02 3. Calculating Present Values For each of the following, compute the present value: Present Value Years Interest Rate Future Value 15 7% $ 19,415 8. 11 47,382 13 10 312,176 25 13 629,381

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* If (P) is principal amount, (i) is the rate of interest and (n) is the number of periods in years, then the interest factor is: O All choices None of the choices O (ni-1) O ni O (1+ni)