A rich relative has bequeathed you growing perpetuity

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1. Suppose you purchased ABC stock 4 month ago and your purchasing price was $40. The ABC stock price went up and down in the past 4 months: $50, $38, $ 42, and $49. What is the monthly downside risk? And What is the Sortino ratio (on the monthly basis)?

2. A rich relative has bequeathed you a growing perpetuity. The first payment will occur in a year and will be $2,000. Each year after? that, you will receive a payment on the anniversary of the last payment that is nbsp 2% larger than the last payment. This pattern of payments will go on forever. Assume that the interest rate is 12% per year.

a. What is? today's value of the? bequest?

b. What is the value of the bequest immediately after the first payment is? made?

Reference no: EM131873199

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