E6.1 (LO 1) (Using Interest Tables) For each of the following cases, indicate (a) to what rate col-umns, and (b) to what number of periods you would refer in looking up the interest factor.1. In a future value of 1 table:AnnualNumber ofRateYears InvestedCompoundeda.9%9.AnnuallyQuarterlySemiannuallyb. 12%c. 10%152. In a present value of an annuity of 1 table:AnnualNumber ofNumber ofFrequency ofRateYears InvolvedRents InvolvedRentsabgini AnnuallySemiannuallya. 9%2525b. 10%1530с. 12%28Quarterly

Rate of Interest Number of Periods 9% 9 3% 20 5% 30

E6.1 (LO 1) (Using Interest Tables) For each of the following cases, indicate (a) to what rate col- umns, and (b) to what number of periods you would refer in looking up the interest factor. 1. In a future value of 1 table: Annual Number of Rate Years Invested Compounded Annually Quarterly Semiannually a. 9% 9. b. 12% 5 с. 10% 15 2. In a present value of an annuity of 1 table: Annual Number of Number of Frequency of Rate Years Involved Rents Involved Rents A 25 15 9% 25 Annually Semiannually a. b. 10% 30 с. 12% Quarterly 28

E6.1 (LO 1) (Using Interest Tables) For each of the following cases, indicate (a) to what rate col- umns, and (b) to what number of periods you would refer in looking up the interest factor. 1. In a future value of 1 table: Annual Number of Rate Years Invested Compounded Annually Quarterly Semiannually a. 9% 9. b. 12% 5 с. 10% 15 2. In a present value of an annuity of 1 table: Annual Number of Number of Frequency of Rate Years Involved Rents Involved Rents A 25 15 9% 25 Annually Semiannually a. b. 10% 30 с. 12% Quarterly 28

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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which one is correct please confirm? QUESTION 31 What is the effective rate of interest on a CD that has a nominal rate of 9.5 percent with interest compounded monthly? a. 9.86% b. 9.93% c. 10.02% d. 9.74%
For each of the following cases, indicate (a) to what interest rate columns and (b) to what number of periods you would refer in looking up the future value factor. (Round percentages to 2 decimal places, e.g. 5,275.)(1) In Table 1 (future value of 1): Annual Rate Number ofYears Invested Compounded Case A 4% 3 Annually Case B 9% 5 Semiannually (a) (b) Case A % periods Case B % periods (2) In Table 2 (future value of an annuity of 1): Annual Rate Number ofYears Invested Compounded Case A 6% 5 Annually Case B 12% 6 Semiannually (a) (b) Case A % periods Case B % periods
Determine the future value of the following single amounts: Invested Amount Interest Rate No. of Periods1. $ 15,000 6% 122. 20,000 8 103. 30,000 12 204. 50,000 4 12
Determine the present value of the following single amounts: Future Amount Interest Rate No. of Periods1. $ 20,000 7% 102. 14,000 8 123. 25,000 12 204. 40,000 10 8
Suppose S500 is invested at 4% compounded quarterly. (a) How long will it take the investament to accumulate to $750 if the exact method for accumulation is in effect? (b) How long will it take the investment to accumulate to $750 if the practical method for accumulation is in effect? Be sure to us linear interpolation! (e) What anmual effective interest rate must 8500 be invested at to accumulate to S750 in 10 years?
correct answer are PV= 2,276.55 and A = 4,724.73 No tables, only formulas, please Find the present value and the accumulation at the end of 10 years of a series of payments that are made up by: £200 annually in arrears during the first 3 years, £35 monthly in arrears thereafter, given that the following interest rates apply: 9% per annum effective for the first 5 years, 6% per annum nominal convertible monthly thereafter.
Assume the following: Spot USDBRL = 5.0500 1YR USD Money Market Rates = 1.50% 1YR BRL Money Market Rates = 9.00% What is the 1YR USDBRL forward rate? (Recall that Money Market Rates are quoted as annualized rates)
Suppose we observe the following rates: 1R1= 0.75%, 1R2=1.20%, E(2r1)=0.907%. If the liquidity premium theory of the term structure of interest rates holds, what is the liquidity premium for year 2, L2?
HI, How do I calculate these using a formula? Not excel. Thanks If the stated annual rate of interest compounded semi-annually is 12.5% then what isthe equivalent:
For each of the following cases, indicate (a) to what rate columns, and (b) to what number of periods you would refer in looking up the interest factor.1. In a future value of 1 table: Annual Rate Number of Years Invested Compounded (a) Rate of Interest (b) Number of Periods a. 11% 10 Annually % b. 8% 8 Quarterly % c. 10% 19 Semiannually % 2. In a present value of an annuity of 1 table: (Round answers to 1 decimal place, e.g. 458,58.1.) Annual Rate Number of Years Invested Number of Rents Involved Frequency of Rents (a) Rate of Interest (b) Number of Periods a. 12% 30 30 Annually % b. 11% 16 32 Semiannually % c. 12% 8 32 Quarterly %
. On December 6, the interest rate on a 1-year T-note was 4.73% and for the 2-year T-note was 4.34%. Assume there is a 0.1% (0.001 in decimals) liquidity premium on the 2-year rate vs the 1-year rate. What is the 1-year rate the markets expected to see in 1-year (i.e., 12/6/23)?
Consider the following balance sheet (in millions) for an FI: Assets Liabilities Duration = 10 years $950 Duration = 2 years $860 Equity $90 What is the FI's duration gap, and FI's interest rate risk exposure ? How can the FI use futures and forward contracts to put on a macrohedge? What is the impact on the FI's equity value if the relative change in interest rates is an increase of 1 percent? That is, DR/(1+R) = 0.01. Suppose that the FI in part (c) macrohedges using Treasury bond futures that are currently priced at 96. What is the impact on the FI's futures position if the relative change in all interest rates is an increase of 1 percent? That is, DR/(1+R) = 0.01. Assume that the deliverable Treasury bond has a duration of nine years. If the FI wants to macrohedge, how many Treasury bond futures contracts does it need?

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