Simple interest is allowed for fraction of period

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1. Bottle One Inc. has a 0.3 probability of a return of 0.3, a 0.1 probability of a rate of return of 0.07, and the remaining probability of a -0.31 rate of return. What is the expected rate of return of Bottle One Inc.?

2. On October 1, 2009, you deposited $5,000 into an account that pays 4.5% interest compounded quarterly. On what date will the account be worth $6,200? Assume that simple interest is allowed for a fraction of a period and give answer to the nearest day. Use a 360-day year.

3. Calculate the price change for a 1-percent decrease in market yield for the following bond: par = $1000; coupon rate = 6 percent, paid semi-annually; market yield = 6 percent; term to maturity = 10 years.

Reference no: EM131994117

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