Problem 13-6 Calculating Rate of Return [LO13-2]Assume that at the beginning of the year, you purchase an Investment for $5,280 that pays $118 annual Income. Also assume theInvestment's value has decreased to $4,880 by the end of the year.a. What is the rate of return for this investment?b. Is the rate of return a positive or a negative number?Complete this question by entering your answers in the tabs below.Required aRequired bWhat is the rate of return for this investment?Note: Input the amount as a positive value. Enter your answer as a percent rounded to 2 decimal places.Rate of return96< Required aRequired b >

The rate of Return place and important role in the decision making as the investor ability to take…

Answered: Problem 13-6 Calculating Rate of Return…

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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Question 16 You currently have $26,000 available for investment for a 20-year period. At what interest rate APR compounded monthly must you nvest this amount in order for it to be worth $100,000 at maturity? a) 0.56% b) 5.67% c) 6.75% d) 10.12% Answer. Question 17 You are consSidering investing in a startup project at a cost of S400,000. You expect the project to return S1,000,000 to you in 10 years. Given the risk of this project, your cost of capital is 14,5%. The NPV for this project is closest to: a) S88,681 b) S99,800 c) S109,388 d) S141,807
Question 4 a) Mike is a speculator and has the following information with regard to the financial markets: Eurodollar Rate = 5% per annum (2.5% for 180 days) Yen Rate = 3% per annum (1.5% for 180 days) Spot Y/$=Y107.00 = $1.00 F180 Y/$=Y 103.00 = $1.00 Mike decides to borrow $20 million for 180 days, to try and see if he can make money on the market. Explain in detail how he will proceed and his NETT profit or loss at the end of the transaction. Show all your calculations. b) What do you understand by the Yen Carry Trade? Is this an example of Covered or Uncovered Interest Arbitrage?
QUESTION 5 You own two investments, A and B, that have a combined total value of $17,400.00. Investment A is expected to make its next payment in 1 month. A's next payment is expected to be $93.00 and subsequent payments are expected to grow by 0.56 percent per month forever. The expected return for investment A is 0.90 percent per month. Investment B is expected to pay $142.00 each quarter forever and the next payment is expected in 3 months. What is the quarterly expected return for investment B? O-1.43% (plus or minus 2 bps) O 0.82% (plus or minus 2 bps) O 0.53% (plus or minus 2 bps) O 0.34% (plus or minus 2 bps) O none of the answers are within 2 bps of the correct answer
1. You want to have this amount at the end 913 Your money will be invested this number of yer You wil invest this amount each year The rate you will earn each year is this How much should you start your investment with, today? A Between 50.00 and 200.00 14 29 4.6% B Between 200.00 and 250.00 C Between 250.00 and 300.00 D Between 300.00 and 500.00
8 es #18 X You are considering two options: • Investment A pays 7.35% interest, compounded semiannually. • Investment B pays 7.4% interest, compounded annually. . What is the effective rate for Investment A? Answer as a percent, rounded to two decimal places. What is the effective rate for Investment B? Answer as a percent, rounded to two decimal places. % Which option should you choose? O Investment A Investment B O The given information is not enough to say.. Note: the correct answer to the third part is determined based on your answers to the previous two. Add Work > Next Question
MC Qu. 9 What amount of cash would result at the end ...What amount of cash would result at the end of one year, if $16,000 is invested today and the rate of return is 8%? (Do not round your PV factors.)a-$16,000b-$17,120c-$17,280d-$14,720ReferencesMultiple ChoiceMC Qu. 9 What amount of cash would result at the end ... Please don't provide answer in image format thank you
Chapter 2 Question 4 Assume a 0.05 time value of money. The sum of $100 received immediately is equivalent to what quantity received in 10 equal annual payments, the first to be received one year from now? What would be the annual amount if the first of 10 payments were received immediately?
QUESTION 10 Beatrice owns two investments, A and B, that have a combined total value of $28,100.00. Investment A is expected to pay $25,180.00 in 4 years from today and has an expected return of 12.77 percent per year. Investment B is expected to pay $21,594.06 in 5 years from today and has an expected return of R per year. What is R, the expected annual return for investment B? O 11.50% (plus or minus 10bps) O 14.58% (plus or minus 10bps) O 10.73% (plus or minus 10bps) O 9.50% (plus or minus 10bps) O none of the answers are within 10bps of the correct answer
Q 6. Suppose Company X has a stock that delivers cash flows every year. The amount of the first cash flow is $A and since then will rise by B% each year forever. The opportunity cost of capital is estimated at C%. a) If the first cash flow comes in year 1, what is the present value of this series of cash flows? b) If the first cash flow comes in year 4, what is the present value of this series of cash flows? c) If the first cash flow comes today, what is the present value of this series of cash flows? $ 2,970.00 7.00% 11.00% A B с
Question content area top Part 1 (Present value of a growing perpetuity) Your firm has taken on cost saving measures that will provide a benefit of $10,000 in the first year. These cost savings will decrease each year at a rate of 4 percent forever. If the appropriate interest rate is 6 percent, what is the present value of these savings? Question content area bottom Part 1 The present value of these cost savings is $enter your response here. (Round to the nearest cent.)
QUESTION 42 Compute the missing variable for each of the following alternatives of investments to accumulate $1,000,000. for 30 years @ 6% annual interest rate: Following are appropriate factors from tables: Table % / n Present Value of annuity due $1 Present Value of ordinary annuity of $1 Present value of $1 Future Value of ordinary annuity of $1 6%/30 12.15812 13.76483 .17411 79.05819 $????????? invested annually at the end of the year. Required Computations: $12,648.91 $72,648.92 $33,3333.33 $11,927.43
Investment End of Year A B C 1 $ 13,000 $ 18,000 2 13,000 3 13,000 4 13,000 5 13,000 $ 13,000 6 13,000 54,000 7 13,000 8 13,000 9 13,000 10 13,000 18,000 Assuming an annual discount rate of 23 percent, find the present value of each investment. a. What is the present value of investment A at an annual discount rate of 23 percent? b. What is the present value of investment B at an annual discount rate of 23 percent? c. What is the present value of investment C at an annual discount rate of 23 percent?

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