Your sister paid $10,000 (CF at t = 0) for an investment that promises to pay $750 at the end of each of the next 5 years, then an additional lump sum payment of $9,000 at the end of the 5th year. What is the expected rate of return on this investment? Select the correct answer. O a. 8.12% O b. 2.12% O c. 4.52% O d. 3.32% O e. 5.72%

Your sister paid $10,000 (CF at t = 0) for an investment that promises to pay $750 at the end of each of the next 5 years, then an additional lump sum payment of $9,000 at the end of the 5th year. What is the expected rate of return on this investment? Select the correct answer. O a. 8.12% O b. 2.12% O c. 4.52% O d. 3.32% O e. 5.72%

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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DJ has an investment that will pay him the following cash flows over the next 5 years: $2,250, $2,710, $3,070, $3,390, & $3,690 Typically his investments earn 6.20%, what is the future value of the investment's cash flows at the end of the 5 yrs? (Don't round factor values. Round Final Answer to 2 Decimal Places) Future value $_____
1. An investor has an opportunity to purchase any of the investments shown in the following table. Which purchase recommendations would you make, assuming that the investor can earn 10% on his investments? stream of cash number of years flows per year A 1 000 10 B 1 200 8. 900 11
Question 6
Am. 407.
Aa.6
You want to retire with $400 000 in the bank and you are able to earn 6% compounded quarterly for the next 25 years. How much money do you have to invest today in order to achieve your goal? Select one: a. $90 251.77 b. $90 201.77 c. $90 001.78 d. $90 251.78 e. $90 001.77
What's the rate of return you would earn if you paid $1,480 for a perpetuity that pays $90 per year? O a. 6.47% O b. 3.04% O c. 6.08% O d. 12.95% O e. 12.16%
You have $100,000 in your savings account and plan to retire with $750,000 in the bank in 40 years. You are hoping to achieve areasonable rate of return on your investments and want to know the target rate you should be looking for. Select one: a. 4.12 b. 3.14 c. 5.16 d. 6.13
Help me with detail explanation I will give Upvote
Paragraph 5h 5. Ann Tyler has come into an inheritance from her grandparents. She is attempting to decide among several investment altematives. The return after 1 year is primarily dependent on the interest rate during the next year. The rate is currently 7%, and Ann anticipates that it will stay the same or go up or down by at most two points. The various investment alternatives plus their returns ($10,000s), given the interest rate changes, are shown in the following table Interest Rate Investment 6% 7% 8% Money market fund Stock growth fund Bond fund Government fund Risk fund Savings bonds 2.5 36 -4.5 3.2 1.2 3.2 2.8 14.7 3.5 3.4 Determine the best investment, using the following decision criteria, a. Maximax b. Maximin c. Equal likelihood 6. The Tech football coaching staff has six basic offensive plays it runs every game. Tech has an upcoming game against State on Saturday, and the Tech coaches know that State emplovs five differont dofonror Cent defensor The conchor have
Assume that Karen Williams desires to accumulate $1,000,000 in 15 years using her money market fund balance of $209,004. At what interest rate must Karen’s investment compound annually? (Round answer to 0 decimal places, e.g. 5%.) Interest rate %
On a whim you purchased a scratch-off lottery ticket at the gas station. It must have been your lucky day because you won $1,500,000. Being logical and rational you decide to invest the money at 6% for 11 years until you are ready to start a family. At the end of 11 years, how much will your investment be worth? Future Value of $1 Periods 2% 3% 4% 5% 6% 10 1.219 1.344 1.480 1.629 1.791 11 1.243 1.384 1.539 1.710 1.898 12 1.268 1.426 1.601 1.796 2.012 13 1.294 1.469 1.665 1.886 2.133 14 1.319 1.513 1.732 1.980 2.261 15 1.346 1.558 1.801 2.079 2.397 Future Value of Annuity of $1 Periods 2% 3% 4% 5% 6% 10 10.950 11.464 12.006 12.578 13.181 11 12.169 12.808 13.486 14.207 14.972 12 13.412 14.192 15.026 15.917 16.870 13 14.680 15.618 16.627 17.713 18.882 14 15.974 17.086 18.292 19.599 21.015 15 17.293 18.599 20.024 21.579 23.276 $2,847,000 $790,500 $22,458,000 $3,018,000

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