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4. An investment what time of $2,950 Anwestent promises. He following cash flow steam: $150 time 0; $2,450 at the end of year 1, $3,475 at the end of year 2; and $4,000 at the end of year B. At a discant rate of 8 yenent, what is the present value of the cash flow stream? a) 8, 658.70 b) 9,915.90 (.) 9, 173.10 € 9,344.51 M ) 5. M endis associates bands have a 15 year maturity, an 4. penent annval capon vote, with semiannual payments, and a par value of $1,000. The going intenst rate (nd) is 8.10 percent. What is the band's pnce? a) 991.71 POD b) 1,008.29 0 1,016.56 dd) 1,033.16 e) 1,041.45 LL LLL LL 6. Lil pear Industries has a band outstanding with a6 years to maturity, a 171 percent nominal compon, semiannual payments, and a $1,000 par value The band cuently sells for $956.10. What is the bond y nominal yield to maturity? a) 1.14196 4.) 8.618010 b) 1.2240 6) 7-86% 1.) 8.85500

Answer 1

4)

Year Cash flow 0 $ 750 1 $ 2,450 2 $ 3,475 3 $ 4,000 PVIF@8% 1.000 0.926 0.857 0.794 Present value 750.00 2,268.52 2,979.25 3,175.33 Present value 9,173.10

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