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Assume that you deposit $10,000 today into an account paying 6% annual interest and leave it on deposit for exactly 8 years.
a. How much will be in the account at the end of 8 years in interest is compounded:
1. annually?
2. semiannually?
3. monthly?
4. continuously?
b. Calculate the effective annual rate (EAR) for a (1) through a (4) above.
c. Based on your findings in parts a and b, what is the general relationship between the frequency of compounding and EAR?
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Valuation Simpkins Corporation does not pay any dividends because it is expanding rapidly and needs to retain all of its earnings.
If I purchase a policy that pays a fixed benefit of 90% of my current salary, how long will it be before this amount covers only 70% of my future salary if I assume salary increases of 4% per year?
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Davidson Corp has a $1000 par value bond outstanding paying annual interest of 6.5%. The bond matures in 25 years. If the present yield to maturity for this bond is 10%, calculate the current price of the bond. List i and n in your solution.
Olympic Sports has two issues of debt outstanding. One is a 7% coupon bond with a face value of $37 million, a maturity of 10 years, and a yield to maturity of 8%. The coupons are paid annually. The other bond issue has a maturity of 15 years, with c..
Implement the trading algorithms and reproduce the results described in the paper - Understanding of statistical arbitrage in the U.S. equity market
Assume that you are CFO of company contemplating stock repurchase next quarter.You know that there are several methods of reducing the current quarterly earning
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