(d) $4,170 every 3 months for 3 years and $1,410 each quarter for the following 25 quarters, all payments payable at the end ofeach quarter. (Round factor values to 5 decimal places, eg. 1.25124 and final answer to O decimal places, e.g. 458,581.)Present value $eTextbook and MediaWhich option would you recommend that Leon exercise?Option (b)Option (d)Option (a)Option (c)d Media Julia Baker died, leaving to her husband Leon an insurance policy contract that provides that the beneficiary (Leon) can choose anyone of the following four options. Money is worth 2.5% per quarter, compounded quarterly. Compute Present value if:Click here to view factor tables(a) $57,000 immediate cash. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g.458,581.)Present valuee Textbook and Mediak(b) $4,170 every 3 months payable at the end of each quarter for 5 years. (Round factor values to 5 decimal places, e.g. 1.25124and final answer to 0 decimal places, eg. 458,581.)Present value $e Textbook and Media(c) $19,220 immediate cash and $1,922 every 3 months for 10 years, payable at the beginning of each 3-month period. (Roundfactor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, eg. 458,581)Present value

Note: As per our guidelines, only the first three subparts will be answered.An estimate of the…

Answered: Julia Baker died, leaving to her…

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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Please use the following information to answer You have account paybles: ₤5 m in one year.InterestUS: 6.10% per annum & InterestUK: 9% per annumSpot exchange rate: $1.50/£ & Forward exchange rate: $1.46/£ (1-year maturity)Call option strike price: $1.46/£ & Put option premium: $0.02/£How much will you receive in $ if you use the forward contract hedge? You must show all work to earn credit. No credit will be given without supporting work. 5,000,000 GBP x $1.46 = $7,300,000 $7,300,000 x 6.10% x 1 year = $445,300 $7,300,000 + $445,300 = $7.7453 million 2. Draw a graph for the forward contract hedge. (X axis is the spot rate in the future. Y axis is “$ cash paid.”)
Find the semiannual effective interest rate for an interest rate of 18 per year compounded daily. Select one: О а. 9.415 O b. 9.215 о с. 9.515 O d. 9.315 О е. 9.115 The alternatives are mutually exclusive and the MARR is 6% per year. Which alterauve uuiu selected? (jze Alternative 1 Alternative 2 Alternative 3 First cost, $ - 200,000 - 550,000 - 1,000,000 Annual cost, $ - 50,000 - 20,000 - 10,000 per year Revenue, $ per year 120,000 120,000 110,000 Salvage value, $ 25,000 Life, years 10 15 Select one: O a. 42722 O b. 41722 о с. 44722 O d. 39722 Oe. 43722
b-1. Annual payment of $1,175 for 11 years at 16% interest. What is the Present Value? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b-2. Annual payment of $975 for 16 years at 16% interest. What is the Present Value? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b-3. Which option would you prefer?
Two alternative courses of action have the following schedules of disbursements. If the MARR is 6% which alternative should be selected? Use present worth analysis. Show your calculations in your working document. Also note that in periods 4 and 5, the values for option B should be - 400 and - 500 respectively. Year 0 1 2345 2 3 A B -$1,300 0 0 0 0 0 $1,300 - $100 -200 -300 400 500 $1,500
Assume you buy a March RM1625 FBM-KLCI call option for RM25 and hold until expiry. What will be your maximum loss in ringgit?
Choose the option having the Highest Net Present Value: $400 to be received in exactly 1 year, discounted at 10%, $400 to be received in exactly 2 years, discounted at 5%. $400 to be received in exactly 3 years, discounted at 2%.
Suppose that you purchase the t bill maturing on November 18 2023 for $9993.793. The T bill matures 133 days aftef the settlment date july 9 2023 and has a face value of $10000. What is the T bill asked discount yield?
a "ll VOLTE OMANTEL ملاك اليوم ۱۱:۳۳ ص If you are expecting to get OMR 10240 at the end of 3 years. Calculate its present value if the interest rate is 9.42% and is computed quarterly. Select one: O a. None of the options O b. 2244.46 O C 7744.46 O d. 6644.46 O e. 3344.46
You are offered the choice of two payments streams A. $150 paid one year from now, and $150 paid two years from now. B. $140 paid one year from now and $164 paid two years from now. a. Which payment stream would you prefer if the interest rate is 9 percent? (Prefer Stream B/Prefer Stream A)? b. Which payment stream would you prefer if the interest rate is 12 percent? (Prefer Stream A/Prefer Stream B)?
(please correct answer and Step by step solutions this question) Assume you have taken a long position in an Amazon 1,850 Strike Price Call option. The $1,850 Strike Price Call option premium = $25. Amazon is currently trading at $1,865, the short-term interest rate = 2% and there are 2 months until expiry. Two months later, at expiration, Amazon had rallied to $1,875. What is the profit or loss on your Amazon 1,850 Strike Price Call option?
What is the present discounted value of $400 to be received one year from now plus $500 to be received two years from now if the interest rate is 4%? А. $751.84 $860.05 C. $899.04 D. $912.89 B.
Use the table below to calculate the premium of the call. This is a 3-year option; the present value must account for T 3. Use (1+r) for discounting. 4. Use the table below to calculate the premium of the call. This is a 3-year option; the present value must account for T=3. Use (1+r) for discounting. SO r $50 6.00% u 2 0.5 3 F3 $59.55 37.3% Strike $80.00 CALL with strike of $80.00 Outcome Ups Downs Probability 1 3 0 5.20% probability 100.00% Cumulative Underlier price $400.00 Revenue Cost from Exercise? from sale purchase Payoff Yes $400.00 $80.00 $320.00 2 2 1 26.20% 94.80% $100.00 Yes $100.00 $80.00 $20.00 3 1 2 43.98% 68.59% $25.00 No $0.00 $0.00 $0.00 4 0 3 24.61% 24.61% $6.25 No $0.00 $0.00 $0.00 Expected value $47.02 $25.13 $21.89

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