Suppose an investor earned a yield of 12.4 percent p.a. on a bond paying coupons twice a year. What is the effective annual yield (EAY) on this investment?
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- You are looking at an investment that has an effective annual rate of 14 percent. (show answers and excel formula equations) a. What is the effective semiannual return? b. What is the effective quarterly return? c. What is the effective monthly return?An investor has the opportunity to make an investment that will provide an effective annual yield of 13.0 percent. She is considering two other investments of equal risk that will provide compound interest monthly and quarterly, respectively. Required: a. What must be the equivalent nominal annual rate (ENAR) for an investment that will provide compound interest monthly to ensure that an equivalent annual yield of 13.0 percent is earned?b. What must be the equivalent nominal annual rate (ENAR) for an investment that will provide compound interest quarterly to ensure that an equivalent annual yield of 13.0 percent is earned? Note: For all requirements, do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places. Please answer fast i give you upvote.You invest $94.1, and your investment account shows $107.9 at the end of year one, $97.9 at the end of year two, and $107.1 at the end of year three. Calculate the Annual Holding Period Return (HPR) over the full period.
- Suppose that an investment promises to pay a nominal 9.6 percent annual rate ofinterest. What is the effective annual interest rate on this investment assuming thatinterest is compounded (a) annually? (b) semiannually? (c) quarterly? (d) monthly? (e)daily (365 days)? (f) Weekly?If the Nominal (APR) rate of return for an investment is 10.15% compounded quarterly, what is the Effective Annual Rate of return (EAR or EFF)?An investment will pay $100 at the end of each of the next 3 years, $200 at the end of Year 4, $300 at the end of Year 5, and $600 at the end of Year 6. A. If other investments of equal risk earn 4% annually, what is its present value? Round your answer to the nearest cent. B. If other investments of equal risk earn 4% annually, what is its future value? Round your answer to the nearest cent.
- Assume that at the beginning of the year, you purchase an investment for $6,300 that pays $130 annual income. Also assume the investment's value has increased to $6,900 by the end of the year. a. What 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 return % b. Is the rate of return a positive or a negative number? Positive NegativeIf an investment of $2,000 grew to $2,520 in three periods, what is the interest rate at which the investment grew? Solve using both present and future value tables.A similar application for investment yields can be made in cases where monthly cash annuities will be received as a return on investment. For example, assume that an investor makes an investment of $51,593 and will receive $400 at the end of each month for the next 20 years (240 months). What annual rate of return, compounded monthly, would be earned on the $51,593?
- What is the internal rate of return (IRR) of an investment that requires an initial investmen of $11,000 today and pays $15,400 in one year's time?Suppose you purchase a ten-year bond with 12% annual coupons. You hold the bond for four years and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 10.64% when you purchased and sold the bond, a. What cash flows will you pay and receive from your investment in the bond per $100 face value? b. What is the internal rate of return of your investment? Note: Assume annual compounding. a. What cash flows will you pay and receive from your investment in the bond per $100 face value? The cash flow at time 1-3 is $ (Round to the nearest cent. Enter a cash outflow as a negative number.) The cash outflow at time 0 is $ number.) (Round to the nearest cent. Enter a cash outflow as a negative The total cash flow at time 4 (after the fourth coupon) is $. (Round to the nearest cent. Enter a cash outflow as a negative number.) b. What is the internal rate of return of your investment? The internal rate of return of your investment is %. (Round to two decimal…Find the PV and FV of an investment that makes the following end-of-year payments. The interest rate is 8%. Year Payment 1 100 2 200 3 400 Rate = 8% To find the PV, use the NPV function: PV = Year Payment x (1 + I )^(N-t) = FV1 100 1.17 116.64 2 200 1.08 216.00 3 400 1.00 400.00 Sum = ?PV = ?FV of PV = ?