Your father paid $10,000 (CF at t = o) for an investment that promises to pay $575 at the end of each of the next 5 years, then an additional lump sum payment of $13,500 at the end of the 5th year. What is the expected rate of return on this investment? Oa: 5.75% b. 4.26% O c. 10.37% Od. 11.33% e. 11.95%
Your father paid $10,000 (CF at t = o) for an investment that promises to pay $575 at the end of each of the next 5 years, then an additional lump sum payment of $13,500 at the end of the 5th year. What is the expected rate of return on this investment? Oa: 5.75% b. 4.26% O c. 10.37% Od. 11.33% e. 11.95%
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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Transcribed Image Text:Your father paid $10,000 (CF at t = o) for an investment that
promises to pay $575 at the end of each of the next 5 years,
then an additional lump sum payment of $13,500 at the end
of the 5th year. What is the expected rate of return on this
investment?
O a. 5.75%
Ob. 4.26%
O c. 10.37%
O d. 11.33%
Oe. 11.95%
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