According to the expectations hypothesis

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Reference no: EM131881944

1. According to the expectations hypothesis, what is the market’s expectation of the one-year interest rate three years from now?

2. Given the following information, calculate the Net Present Value for this investment: First-year NOI: $18,775 with an annual growth rate of 7%; Purchase Price = $ 520,000; Equity Investment = 20%; Discount Rate = 12%; BTER = $ 840,000

A. $ 420,298

B. $ 553,298

C. $ 449,298

D. $ 520,298

3. A chunk of ice fell from the sky damaging Theo’s house. The FMV of the house before the event was $350,000, and after FMV was $250,000. Insurance is expected to cover all but $15,000 of this loss; however, as of the end of the year, the insurance proceeds had not yet been received. Theo's AGI is $120,000. How much should Theo take as a personal casualty loss deduction in this year?

A. $2,900

B. $3,000

C. $15,000

D. $14,900

E. None of the other answers is correct

Reference no: EM131881944

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