Reference no: EM13969800
1. Stanley Roper has $2,100 that he is looking to invest. His brother approached him with an investment opportunity that could give Patrick $4,500 in 4 years. What interest rate would the investment have to yield in order for Stanley's brother to deliver on his promise? (Answer needs to be stated as a decimal. For example: .1192)
2. Chuck Brown will receive from his investment cash flows of $3,155, $3,460, and $3,820 at the end of years 1, 2 and 3 respectively. If he can earn 7.5 percent on any investment that he makes, what is the future value of his investment cash flows at the end of three years? (Round to the nearest dollar.)
3. Your brother has asked you to help him with choosing an investment. He has $5,900 to invest today for a period of two years. You identify a bank CD that pays an interest rate of 0.0500 annually with the interest being paid quarterly. What will be the value of the investment in two years?
4. You are evaluating a growing perpetuity product from a large financial services firm. The product promises an initial payment of $23,000 at the end of this year and subsequent payments that will thereafter grow at a rate of 0.03 annually. If you use a discount rate of 0.10 for investment products, what is the present value of this growing perpetuity?
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Estimate the present value of the cash flows
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What prevents many poor people from attending college
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Should parents have ultimate decision to their children
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Risk-free rate remained constant
: 1. Stock A has a beta of 0.7, whereas Stock B has a beta of 1.3. Portfolio P has 50% invested in both A and B. Which of the following would occur if the market risk premium increased by 1% but the risk-free rate remained constant?
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How did humans evolve, and where did they migrate
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: The oil is to be piped to the refinery 8 miles down the shore. If the cost of laying pipe is $100,000 per mile underwater and $75,000 per mile over land. How much of each pipe should be used in order to minimize the cost of the project?
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