Chapter P5, Problem 3Q

Determine the effective annual yield for each investment. Then select the better investment. 9.5% compounded monthly. 9.75% compounded annually

You are looking at an investment that has an effective annual rate of 14 percent. (show answers and excel formula equations) a. What is the effective semiannual return? b. What is the effective quarterly return? c. What is the effective monthly return?

An investment advisor has recommended a R50,000 portfolio containing assets R, J, and K; R25,000 will be invested in asset R, with an expected annual return of 12 percent; R10,000 will be invested in asset J, with an expected annual return of 18 percent; and R15,000 will be invested in asset K, with an expected annual return of 8 percent. What is the expected annual return of this portfolio? What is the correct answer?    A. 12.01%  B. 12.00%  C. 11.98%  D. 12.93%

Compute the Payback Period, Discounted Payback Period, Net Present Value, Internal Rate of Return, and Productivity Index of all four alternatives based on cash flow. use 10 percent for the cost of capital in the calculations. For the Payback Period and for the Discounted Payback Period, compute to the midyear points.  ALL Information is in the PNGs!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Assume you are considering a portfolio containing Asset 1 and Asset 2. Asset 1 will represent 37% of the dollar value of the​ portfolio, and asset 2 will account for the other 63%. Assume that the portfolio is rebalanced at the end of each year. The expected returns over the next 6​ years, 2021–2026​, for each of these assets are summarized in the following​ table: Data table ​(Click on the icon here    in order to copy the contents of the data table below into a​ spreadsheet.)     Projected Return Year Asset L Asset M 2021 −9​%   33​%   2022 15​%   5​%   2023 26​%   −9​%   2024 4​%   18​%   2025 −9​%   33​%   2026 33​%   −18​% . a. Calculate the expected portfolio​ return, rp​, for each of the 6 years. b. Calculate the average expected portfolio​ return, rp​, over the​ 6-year period. c. Calculate the standard deviation of expected portfolio​ returns, sp​, over…

For the investment shown in the following​ table, calculate the total return earned over the unspecified time period.   Cash flow during period ​Beginning-of- period value ​End-of- period value −$10 ​$3,200 ​$2,800   The total return on the investment is __​%.​

An investor has the opportunity to make an investment that will provide an effective annual yield of 12 percent. She is considering two other investments of equal risk that will provide compound interest monthly and quarterly, respectively. What must the equivalent nominal annual rate (ENAR) be for each of these two investments to ensure that an equivalent annual yield of12 percent is earned?

An investment will pay $20,400 at the end of the first year, $30,400 at the end of the second year, and $50,400 at the end of the third year. (FV of $1, PV of $1, FVA of $1, and PVA of $1) Note: Use the appropriate factor(s) from the tables provided. Required: Determine the present value of this investment using a 9 percent annual interest rate.

Consider a position consisting of a $100,000 investment in asset A and a $100,000 investment in asset B. Assume that the daily volatilities of both assets are 1% and that the coefficient of correlation between their returns is 0.3. What is the 5-day 99% VaR for the portfolio?