(Related to Checkpoint​ 5.6) ​ (Solving for i​) You are considering investing in a security that will pay you ​$1,000 in 25 years.   a.  If the appropriate discount rate is 11 percent​, what is the present value of this​ investment? b.  Assume these investments sell for ​$259 in return for which you receive ​$1,000 in 25 years. What is the rate of return investors earn on this investment if they buy it for ​$259​? a.  If the appropriate discount rate is 11 ​percent, the present value of this investment is ​$nothing. ​(Round to the nearest​ cent.)

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
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(Related to Checkpoint​ 5.6) ​ (Solving for
i​)
You are considering investing in a security that will pay you
​$1,000
in
25
years.
 
a.  If the appropriate discount rate is
11
percent​,
what is the present value of this​ investment?
b.  Assume these investments sell for
​$259
in return for which you receive
​$1,000
in
25
years. What is the rate of return investors earn on this investment if they buy it for
​$259​?
a.  If the appropriate discount rate is
11
​percent, the present value of this investment is
​$nothing.
​(Round to the nearest​ cent.)
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