BAF 202 Financial institutions and Markets Assignment

Assignment Help Other Subject

Reference no: EM132390981 , Length: 1 Page

Course Code - BAF 202

Course Name - Financial institutions & Markets Assignment Help and Solution

Emirates College of Technology, Abu Dhabi, UAE

Question 1 - You are considering the purchase of a $ 1,500 face value of bond that pays 12% coupon interest per year and with maturity of 10 years, calculate the present value of the bond if:

a) The Required rate of return (rrr) is 10%.

b) The Required rate of return (rrr) is 13%.

c) What do your answers to part (A) and (B) say about the relation between the present value and face value.

Question 2 -

1- Calculate the future value of $12,000 invested today for 3 years if your investment pays 8% compounded semiannually.

2- Calculate the present value of $9,000 received 6 years from today if your investment pays 12% compounded quarterly.

3- Calculate the present value of the following annuity stream:

a) Ordinary annuity of $5,000 received each year for 5 years if your investment pays 5% compounded annually.

b) Ordinary annuity of $5,000 received each year for 5 years if your investment pays 8% compounded annually.

c) Ordinary annuity of $5,000 received each year for 5 years if your investment pays 8% compounded semiannually.

Need to write the equation then calculate.

Reference no: EM132390981

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