Answered: 3. What is the present value of a…

3. What is the present value of a security that will pay $15,000 in 15 ye securities of equal risk pay 15% annually ? * a) $1843

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

BJA/
lanation Chapte...
A Adaptive Math Ad.
5 New Tab
O c) 5.35 years
O d) 20 years
O e) None of the above
3. What is the present value of a security that will pay $15,000 in 15 yea
securities of equal risk pay 15% annually ? *
a) $1843
O b) $4787
O ) $4066
O d) $4728
O e) None of the above
2 Chapter 5 Time.
O O C

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