Alternatives in the present or future worth methods

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1. Why we cannot use different compounding periods when comparing alternatives in the present or future worth methods? Give an example of how different compounding periods will affect the selection of an alternative

2. In January, 2016, a 30-year government bond with a face of $1000 makes annual coupn payments of 5% and offers a yeild of 7% annually compounded. Exactly 24 months later, in January, 2018, the bond still has a yield of 7%. What is the ANNUAL percent return that the bondholder has earned for the 24 month period?

Reference no: EM131965800

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