You have purchased a guaranteed investment contract (GIC) from an insurance firm that promises to pay...
You have purchased a guaranteed investment contract (GIC) from an insurance firm that promises to pay you a 7% compound rate of return per year for 7 years. If you pay $15,000 for the GIC today and receive no interest along the way, you will get __________ in 7 years (to the nearest dollar).
-
$22,350
-
$24,500
-
$24,087
-
$22,511
Homework Answers
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You have purchased a guaranteed investment contract (GIC) from
an insurance firm that promises to pay...
You have purchased a guaranteed investment contract (GIC) from an insurance firm that promises to pay...
You have purchased a guaranteed investment contract (GIC) from an insurance firm that promises to pay you a 7% compound rate of return per year for 5 years. If you pay $15,000 for the GIC today and receive no interest along the way, you will get __________ in 5 years (to the nearest dollar).
30. You have purchased a guaranteed investment contract() from an insurance firm that promises to pay...
30. You have purchased a guaranteed investment contract() from an insurance firm that promises to pay you a 5% compound rate of return per year for 6 years. If you pay $10,000 for the GIC today and receive no interest along the way, you will get in 6 years (to the nearest dollar). (C) $13,401 $13,676 $12,565 $13,000
1) 2) A bond with a 7-year duration is worth $1,076, and its yield to maturity...
1)
2)
A bond with a 7-year duration is worth $1,076, and its yield to maturity is 7.6%. If the yield to maturity falls to 7.48%, you would predict that the new value of the bond will be approximately You have purchased a guaranteed investment contract (GIC) from an insurance firm that promises to pay you a 7% compound rate of return per year for 6 years. If you pay $15,000 for the GIC today and receive no interest along...
- Example: An insurance company issues a guaranteed investment contract (GIC) for $10,000. If the GIC...
- Example: An insurance company issues a guaranteed investment contract (GIC) for $10,000. If the GIC has a five-year maturity and a guaranteed interest rate of 8%, i t promises to pay $10,000 x 1.085= $14,693.28 • The company can choose to fund its obligation with $10,000 of 8% annual coupon bonds, selling at par value, with six years to maturity. As long as the market interest rate stays at 8%, the company has fully funded the obligation. Why? •...
Immunization . Example: An insurance company issues a guaranteed investment contract (GIC) for $10,000. If the...
Immunization . Example: An insurance company issues a guaranteed investment contract (GIC) for $10,000. If the GIC has a five-year maturity and a guaranteed interest rate of 8%, i t promises to pay $10,000 x 1.085= $14,693.28 . The company can choose to fund its obligation with $10,000 of 8% annual coupon bonds, selling at par value, with six years to maturity. As long as the market interest rate stays at 8 %, the company has fully funded the obligation....
If you had an investment opportunity that promises to pay you $29,000 in four years and...
If you had an investment opportunity that promises to pay you $29,000 in four years and you could earn a 8% annual return investing your money elsewhere What is the most you should be willing to invest today in this opportunity? (FV of $1, PV of $1, FVA of $1, and PVA of $1). (Use appropriate factor(s) from the tables provided. Round final answer to the nearest whole dollar.)
How much would you be willing to pay today for an annuity that promises to pay...
How much would you be willing to pay today for an annuity that promises to pay $3,882 per year for 12 years, beginning exactly one year from today. Your relevant interest rate is 6 percent. DO NOT USE DOLLAR SIGNS OR COMMAS IN YOUR ANSWER. ROUND ANSWER TO THE NEAREST DOLLAR
An investment promises to pay you cash flows of $12,000 at the end of each year...
An investment promises to pay you cash flows of $12,000 at the end of each year for the next 11 years. If you were to pay $75,000 today for this investment, what would your annual rate of return be? (Calculate your answer as a percentage. Type 86 for 86%).
Suppose you purchased long-term bonds issued by ABC Corporation. The firm promises to pay an 8%...
Suppose you purchased long-term bonds issued by ABC Corporation. The firm promises to pay an 8% annual coupon until maturity and to pay the par value at maturity, which is 10 years from today. The coupon payment per annum will be $ ____ and it is considered the annuity component of a bond and the maturity value of $ ______ is considered the lump sum component of a bond.
You have just won $20,000 in the state lottery, which promises to pay you $1,000 (tax...
You have just won $20,000 in the state lottery, which promises to pay you $1,000 (tax free) every year for the next twenty years. The interest rate is 5%. In reality, you receive the first payment of $1,000 today, which is worth today. (Round your response to the nearest penny) The value of the second $1,000 payment is worth Stoday (Round your response to the nearest penny) Your total lottery winnings are actually worth $20,000 to you today
30. You have purchased a guaranteed investment contract() from an insurance firm that promises to pay you a 5% compound rate of return per year for 6 years. If you pay $10,000 for the GIC today and receive no interest along the way, you will get in 6 years (to the nearest dollar). (C) $13,401 $13,676 $12,565 $13,000
1)
2)
A bond with a 7-year duration is worth $1,076, and its yield to maturity is 7.6%. If the yield to maturity falls to 7.48%, you would predict that the new value of the bond will be approximately You have purchased a guaranteed investment contract (GIC) from an insurance firm that promises to pay you a 7% compound rate of return per year for 6 years. If you pay $15,000 for the GIC today and receive no interest along...
- Example: An insurance company issues a guaranteed investment contract (GIC) for $10,000. If the GIC has a five-year maturity and a guaranteed interest rate of 8%, i t promises to pay $10,000 x 1.085= $14,693.28 • The company can choose to fund its obligation with $10,000 of 8% annual coupon bonds, selling at par value, with six years to maturity. As long as the market interest rate stays at 8%, the company has fully funded the obligation. Why? •...
Immunization . Example: An insurance company issues a guaranteed investment contract (GIC) for $10,000. If the GIC has a five-year maturity and a guaranteed interest rate of 8%, i t promises to pay $10,000 x 1.085= $14,693.28 . The company can choose to fund its obligation with $10,000 of 8% annual coupon bonds, selling at par value, with six years to maturity. As long as the market interest rate stays at 8 %, the company has fully funded the obligation....
If you had an investment opportunity that promises to pay you $29,000 in four years and you could earn a 8% annual return investing your money elsewhere What is the most you should be willing to invest today in this opportunity? (FV of $1, PV of $1, FVA of $1, and PVA of $1). (Use appropriate factor(s) from the tables provided. Round final answer to the nearest whole dollar.)
How much would you be willing to pay today for an annuity that promises to pay $3,882 per year for 12 years, beginning exactly one year from today. Your relevant interest rate is 6 percent. DO NOT USE DOLLAR SIGNS OR COMMAS IN YOUR ANSWER. ROUND ANSWER TO THE NEAREST DOLLAR
An investment promises to pay you cash flows of $12,000 at the end of each year for the next 11 years. If you were to pay $75,000 today for this investment, what would your annual rate of return be? (Calculate your answer as a percentage. Type 86 for 86%).
You have just won $20,000 in the state lottery, which promises to pay you $1,000 (tax free) every year for the next twenty years. The interest rate is 5%. In reality, you receive the first payment of $1,000 today, which is worth today. (Round your response to the nearest penny) The value of the second $1,000 payment is worth Stoday (Round your response to the nearest penny) Your total lottery winnings are actually worth $20,000 to you today
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