Reference no: EM131867872
1. Which one of the following investments provides the lowest effective annual rate of return (i.e., which of the following investments is the WORST (i.e., the smallest EAR), assuming an investor wants to avoid earning the lowest return over an investing horizon of 10 years)?
A. An investment which has a 3.0 percent nominal rate with annual compounding.
B. An investment which has a 2.98 percent nominal rate with semi-annual compounding.
C. An investment which has a 2.965 percent nominal rate with quarterly compounding.
D. An investment which has a 2.9575 percent nominal rate with monthly compounding.
E. An investment which has a 2.955 percent nominal rate and daily (365) compounding.
2. For a given nominal interest rate greater than 0%, if the number of compounding periods per year increases (for example, from quarterly to daily), the future value of $1000 to be received exactly 10 years from today will:
A. increase.
B. decrease.
C. remain unchanged.
D. either increase or decrease, depending on the nominal interest rate.
|
What is internal rate of return
: Franchising, Inc. is considering a major investment. The investment will have an initial cost of $728,000. What is the internal rate of return?
|
|
Which stock is likely to give her a better return
: Which stock is likely to give her a better return? Which stock is riskier?
|
|
Determine the time of validity of note with nominal value
: To determine the time of validity of a note with nominal value of $ 1,000, discounted value of $ 978 and discount rate per year of 12 %.
|
|
Determines discount rate equivalent to rate of return
: Determines the discount rate equivalent to a rate of return of 25.5%
|
|
Provides the lowest effective annual rate of return
: Which one of the following investments provides the lowest effective annual rate of return
|
|
Determine the nominal value of paid
: Determine the nominal value of a paid whose discounted value today is $434,522, expires in 18 months and the discount rate is 10.23%.
|
|
What will be the balance on this mortgage after two years
: The loan will become a fully amortizing mortgage after 2 years. What will be the balance on this mortgage after 2 years?
|
|
Compute the payment-loan balances and yield for the ARM
: Compute the payment, loan balances and yield for the ARM in year 2.
|
|
Compute the beginning balance-payment and interest paid
: Compute the beginning balance, the payment, the interest paid, the amortization and the ending balance of year 4.
|