You open an account where you deposit $500 today. Further, you deposit $800 at the beginning of next year, withdraw $250 at the beginning of year two and deposit $450 at the beginning of year 3. The return for year 1 is 6%, for year 2 it is -8%, for year 3 it is 4.5% and for year 4 it is -2%. What is your dollar-weighted or money-weighted return (in percent) for the four-year period? Answer to two decimals. -1.45 -6.95 -11.92

You open an account where you deposit $500 today. Further, you deposit $800 at the beginning of next year, withdraw $250 at the beginning of year two and deposit $450 at the beginning of year 3. The return for year 1 is 6%, for year 2 it is -8%, for year 3 it is 4.5% and for year 4 it is -2%. What is your dollar-weighted or money-weighted return (in percent) for the four-year period? Answer to two decimals. -1.45 -6.95 -11.92

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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You are considering an investment that is expected to pay 5 percent in year 1, 7 percent in years 2 and 3 and 9 percent in year 4. If you invest $2,000 today, what will this investment be worth at the end of the fourth year? A. $2,620.68B. $2,693.71C. $2,713.04D. $2,501.42
Mitchell Investments has offered you the following investment opportunity: $7,000 at the end of each year for the first 7 years, plus $6,000 at the end of each year from years 8 through 14, plus $3,000 at the end of each year from years 15 through 21. Use Table II and Table IV or a financial calculator to answer the questions. Round your answers to the nearest dollar. How much would you be willing to pay for this investment if you required a 8 percent rate of return?$ If the payments were received at the beginning of each year, what would you be willing to pay for this investment?$
Suppose you makes a $1,000 initial investment today, a $4,000 additional investment at the end of year one, and another $500 investment at the end of year two. You had returns of 10% in year one, 2% in year two, and -5% in year three. What is the dollar-weighted average return on your investments? Select one: a. -2.59% b. 10.00% c. 0.51% d. -0.73% e. 3.00%
For each of the following situations, identify (1) the case as either (a) a present or a future value and (b) asingle amount or an annuity, (2) the table you would use in your computations (but do not solve the problem),and (3) the interest rate and time periods you would use. You need to accumulate $10,000 for a trip you wish to take in four years. You are able to earn 8% compounded semiannually on your savings. You plan to make only one deposit and let the money accumulate for four years. How would you determine the amount of the one-time deposit?
You want to invest $25,000 and are looking for safe investment options. Your bank is offering you a certificate of deposit that pays a nominal rate of 4% that is compounded bimonthly (every two months). What is the effective rate of return that you will earn from this investment? 4.067% 4.188% 3.926% 4.152% Suppose you decide to deposit $25,000 in a savings account that pays a nominal rate of 4%, but interest is compounded daily. Based on a 365-day year, how much would you have in the account after six months? (Hint: To calculate the number of days, divide the number of months by 12 and multiply by 365.) $25,505.01 $26,015.11 $26,397.69 $24,739.86
If you earn 5% per year on your bank account, how long will it take an account with $110 to double to $220? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Investment A requires you to pay $30,000 at t = 0 and you will receive $49,000 after five years. Investment B costs $73,000 and provides a cash flow of $128,000 after seven years. What is the rate of return for each of the two investments?
You want to invest $24,000 and are looking for safe investment options. Your bank is offering you a certificate of deposit that pays a nominal rate of 6% that is compounded quarterly. What is the effective rate of return that you will earn from this investment?
Please advise on these time value of money practice problems. How would you solve these using a financial calculator? What values would you enter for N, I/YR, PV, PMT, and FV ? a) Calculate the PV when you plan to receive $5,000 in 5 years with a 10% discount rate. b) Calculate the FV of a $10,000 deposit today for 10 years @ 5%. c) What is the PV of receiving $2,500 for each of the next 5 years with a 10% discount rate?
Me
You have an opportunity to make an investment that will pay $ 300 at the end of the first year, $ 100 at the end of the second year, $ 200 at the end of the third year, $ 400 at the end of the fourth year, and $500 at the end of the fifth year. a. Find the present value if the interest rate is 9 percent. (Hint: You can simply bring each cash flow back to the present and then add them up. Another way to work this problem is to either use the =NPV function in Excel or to use your CF key on a financial calculator —but you'll want to check your calculator's manual before you use this key. Keep in mind that with the =NPV function in Excel, there is no initial outlay. That is, all this function does is bring all the future cash flows back to the present. With a financial calculator, you should keep in mind that CF0 is the initial outlay or cash flow at time 0, and, because there is no cash flow at time 0, CF0 =0.) b. What would happen to the…
James plans to receive a monthly annuity of $779 for the next 25 years as part of his inheritance. The interest rate is 10.78 per annum compounded monthly Calculate the present value (PV) of this annuity. $72.26 O$779.00 $867.16 $289.05 O $1.11

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