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
Related questions
Concept explainers
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.
Question
100%
What is the interest rate on a loan of $52,000 for 54 days that yields $780.00 interest?
Group of answer choices
110%
0.3%
0.1%
10%
10%
Transcribed Image Text:9:26
( Back FV and PV Tables.pdf Q
Compound Interest Table
İnterest Rate Per Compounding Period
1%
2%
Period
Period
1%
2%
3%
4%
5%
6%
8%
10%
1.08000
1.10000
1
1.01500
1.03023
1
1.01000
1.02000
1.02500
1.03000
1.04000
1.05000
1.06000
1.02010
1.04040
1.05063
1.06090
1.08160
1.10250
1.12360
1.16640
1.21000
1.03030
1.04568
1.06121
1.07689
1.09273
1.12486
1.15763
1.19102
1.25971
1.33100
4
1.04060
1.06136
1.08243
1.10381
1.12551
1.16986
1.21551
1.26248
1.36049
1.46410
4
1.05101
1.07728
1.10408
1.13141
1.15927
1.21665
1.27628
1.33823
1.46933
1.61051
1.06152
1.09344
1.12616
1.15969
1.19405
1.26532
1.34010
1.41852
1.58687
1.77156
7
1.07214
1.10984
1.14869
1.18869
1.22987
1.31593
1.40710
1.50363
1.71382
1.94872
7
1.08286
1.12649
1.17166
1.21840
1.26677
1.36857
1.47746
1.59385
1.85093
2.14359
9.
1.09369
1.14339
1.19509
1.24886
1.30477
1.42331
1.55133
1.68948
1.99900
2.35795
9
2.59374
10
1.28008
1.31209
10
1.10462
1.16054
1.21899
1.34392
1.48024
1.62889
1.79085
2.15892
11
1.11567
1.17795
1.24337
1.38423
1.53945
1.71034
1.89830
2.33164
2.85312
11
12
1.12683
1.19562
1.26824
1.34489
1.42576
1.60103
1.79586
2.01220
2.51817
3.13843
12
13
1.13809
1.21355
1.29361
1.37851
1.46853
1.66507
1.88565
2.13293
2.71962
3.45227
13
14
1.14947
1.23176
1.31948
1.41297
1.51259
1.73168
1.97993
2.26090
2.93719
3.79750
14
15
1.16097
1.25023
1.34587
1.44830
1.55797.
1.80094.
2.07893
2.39656
3.17217
4.17725
15
16
1.17258
1.26899
1.37279
1.48451
1.60471
1.87298
2.18287
2.54035
3.42594
4.59497
16
17
1.18430
1.28802
1.40024
1.52162
1.65285
1.94790
2.29202
2.69277
3.70002
5.05447
17
1.55966
1.59865
18
1.19615
1.30734
1.42825
1.70243
2.02582
2.40662
2.85434
3.99602
5.55992
18
19
1.20811
1.32695
1.45681
1.75351
2.10685
2.52695
3.02560
4.31570
6.11591
19
20
1.22019
1.34686
1.48595
1.63862
1.80611
2.19112
2.65330
3.20714
4.66096
6.72750
20
21
1.23239
1.36706
1.51567
1.67958
1.86029
2.27877
2.78596
3.39956
5.03383
7.40025
21
22
1.24472
1.38756
1.54598
1.72157
1.91610
2.36992
2.92526
3.60354
5.43654
8.14027
22
3.81975
5.87146
8.95430
23
1.97359
2.03279
23
1.25716
1.40838
1.57690
1.76461
2.46472
3.07152
24
1.26973
1.42950
1.60844
1.80873
2.56330
3.22510
4.04893
6.34118
9.84973
24
25
1.28243
1.45095
1.64061
1.85394
2.09378
2.66584
3.38635
4.29187
6.84848
10.83471
25
1.67342-1.90029- 2-15659-2.77247--- 3:55567- 4.54938
2.22129
26
1.29526 1.47271-
7.39635
11.918-18
-26
4.82235
7.98806
8.62711
27
1.30821
1.49480
1.70689
1.94780
2.88337
3.73346
13.10999
27
28
1.32129
1.51722
1.74102
1.99650
2.28793
2.99870
3.92013
5.11169
14.42099
28
29
1.33450
1.53998
1.77584
2.04641
2.35657
3.11865
4.11614
5.41839
9.31727
15.86309
29
30
1.34785
1.56308
1.81136
2.09757
2.42726
3.24340
4.32194
5.74349
10.06266
17.44940
30
Interest Rate per Compounding Period
1%
2%
Period
1%
2%
3%
4%
5%
6%
8%
10%
Period
1
.99010
.98522
.98039
.97561
.97087
.96154
.95238
.94340
.92593
.90909
Quick TIP
.98030
.97066
.96117
.95181
.94260
.92456
.90703
.89000
.85734
.82645
2
Period refers to
3
.97059
.95632
.94232
.92860
.91514
.88900
.86384
.83962
.79383
.75131
3
the number of
4
.96098
.94218
.92385
.90595
.88849
.85480
.82270
.79209
.73503
.68301
4
compounding
periods.
.95147
.92826
.90573
.88385
.86261
.82193
.78353
.74726
.68058
.62092
6.
.94205
.91454
.88797
.86230
.83748
.79031
.74622
.70496
.63017
.56447
7
.93272
.90103
.87056
.84127
.81309
.75992
.71068
.66506
:58349
.51316
7
8
.92348
.88771
.85349
.82075
.78941
.73069
.67684
.62741
.54027
.46651
9.
.91434
.87459
.83676
.80073
.76642
.70259
.64461
.59190
.50025
.42410
9.
10
.90529
.86167
.82035
.78120
.74409
.67556
.61391
.55839
.46319
.38554
10
11
.89632
.84893
.80426
.76214
.72242
.64958
.58468
.52679
.42888
.35049
11
12
.88745
.83639
.78849
.74356
.70138
.62460
.55684
.49697
.39711
.31863
12
13
.87866
.82403
.77303
.72542
.68095
.60057
.52032
.46884
.36770
.28966
13
14
.86996
.81185
.75788
.70773
.66112
.57748
.50507
.44230
.34036
.26333
14
15
.86135
.79985
.74301
.69047
.64186
.55526
.48102
.41727
.31524
.23939
15
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Transcribed Image Text:9:26
( Back FV and PV Tables.pdf Q
Interest Rate per Compounding Period
Period
1%
2%
1%
2%
3%
4%
5%
6%
8%
10%
Period
1
.99010
.98522
.98039
.97561
.97087
.96154
.95238
.94340
.92593
.90909
Quick TIP
98030
.97066
.96117
.95181
.94260
.92456
.90703
.89000
.85734
.82645
2
35
Period refers to
3
97059
.95632
.94232
.92860
.91514
.88900
.86384
.83962
.79383
.75131
the number of
.96098
.94218
.92385
.90595
.88849
.85480
.82270
.79209
.73503
.68301
4
compounding
periods.
.95147
.92826
.90573
.88385
.86261
.82193
.78353
.74726
.68058
.62092
5
6.
.94205
.91454
.88797
.86230
.83748
.79031
.74622
.70496 · .63017
.56447
6.
7
.93272
.90103
.87056
.84127
.81309
.75992
.71068
.66506
:58349
.51316
7
8
.92348
.88771
.85349
.82075
.78941
.73069
.67684
.62741
.54027
.46651
9.
.91434
.87459
.83676
.80073
.76642
.70259
.64461
.59190
.50025
.42410
9.
10
.90529
.86167
.82035
.78120
.74409
.67556
.61391
.55839
.46319
.38554
10
11
.89632
.84893
.80426
.76214
.72242
.64958
.58468
.52679
.42888
.35049
12
.88745
.83639
.78849
.74356
.70138
.62460
.55684
.49697
.39711
.31863
12
13
.87866
.82403
.77303
.72542
.68095
.60057
.52032
.46884
.36770
.28966
13
14
.86996
.81185
.75788
.70773
.66112
.57748
.50507
.44230
.34036
.26333
14
15
.86135
.79985
.74301
.69047
.64186
.55526
.48102
.41727
.31524
.23939
15
16
.85282
.78803
.72845
.67362
.62317
.53391
.45811
.39365
.29189
.21763
16
17
.84438
.77639
.71416
.65720
.60502
.51337
.43630
.37136
.27027
.19784
17
18
.83602
.76491
.70016
.64117
.58739
.49363
.41552
.35034
,25025
.17986
18
19
.82774
.75361
.68643
.62553
.57029
.47464
.39573
.33051
.23171
.16351
19
20
.81954
.74247
.67297
.61027
.55368
.45639
.37689
.31180
.21455
.14864
20
21
.81143
.73150
.65978
.59539
.53755
.43883
.35894
.29416
.19866
.13513
21
22
.80340
.72069
.64684
.58086
.52189
.42196
.34185
.27751
.18394
.12285
22
23
.79544
.71004
.63416
.56670
.50669
.40573
.32557
.26180
.17032
.11168
23
24
.78757
.69954
.62172
.55288
.49193
.39012
.31007
.24698
.15770
.10153
24
25
.77977
.68921
.60953
.53939
.47761
.37512
.29530
.23300
.14602
.09230
25
26
.77205
.67902
.59758
.52623
.46369
.36069
.28124
.21981
.13520
.08391
26
27
.76440
.66899
.58586
.51340
.45019
.34682
.26785
.20737
.12519
.07628
27
28
.75684
.65910
.57437
.50088 .43708
.33348
.25509
.19563
.11591
.06934
28
29
.74934
.64936
.56311
.48866 .42435
.32065
.24295
.18456
.10733
.06304
29
30
.74192
.63976
.55207
.47674
.41199
.30832
.23138
.17411
.09938
.05731
30
31
.73458
.63031
.54125
.46511
.39999
.29646
.22036
.16425
.09202
.05210
31
32
.72730
.62099
.53063
.45377
.38834
.28506
.20987
.15496
.08520 .04736
32
33
.72010
.61182
.52023
.44270
.37703
.27409
.19987
.14619
.07889
.04306
33
34
.71297
.60277
.51003
.43191
.36604
.26355
.19035
.13791
.07305
.03914
34
35
.70591
.59387
.50003
.42137
.35538
.25342
.18129
.13011
.06763
.03558
35
36
.69892
.58509
.49022
.41109
.34503
.24367
.17266
.12274
.06262
.03235
36
37
.69200
.57644
.48061
.40107
.33498
.23430
.16444
.11579
.05799
.02941
37
38
.68515
.56792
47119
.39128
.32523
.22529
.15661
.10924
.05369
.02673
38
39
.67837
.55953
.46195
.38174
.31575
.21662
.14915
.10306
.04971
.02430
39
40
.67165
.55126
.45289
.37243
.30656
.20829
.14205
.09722
.04603
.02209
40
41
.66500
.54312
44401
.36335
.29763
.20028
.13528
.09172
.04262
.02009
41
42
.65842
.53509
.43530
.35448
.28896
.19257
.12884
.08653
.03946
.01826
42
43
.65190
.52718
.42677
.34584
.28054
.18517
.12270
.08163
.03654
.01660
43
44
.64545
.51939
.41840
.33740
.27237
.17805
.11686
.07701
.03383
.01509
44
45
.63905
.51171
.41020
.32917
.26444
.17120
.11130
.07265
.03133
.01372
45
46
.63273
.50415
.40215
.32115
.25674
.16461
.10600
.06854
.02901
.01247
46
47
.62646
.49670
.39427
.31331
.24926
.15828
.10095
.06466
.02686
.01134
47
48
.62026
.48936
.38654
.30567
.24200
15219
.09614
.06100
.02487
.01031
48
49
.61412
.48213
.37896
.29822
.23495
.14634
.09156
.05755
.02303
.00937
49
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