Olga owns two investments, A and B, that have a combined total value of $28,500.00. Investment A is expected to pay $26,560.00 in 3 years from today andhas an expected return of 12.32 percent per year. Investment B is expected to pay $17,158.82 in 7 years from today and has an expected return of R per year.What is R, the expected annual return for investment B?O9.87% (plus or minus 10bps)8.40% (plus or minus 10bps)6.30% (plus or minus 10bps)7.31% (plus or minus 10bps)none of the answers are within 10bps of the correct answer

Step 1: Given Value for Calculation Total Present value = tpv = $28,500 Investment AFuture Value =…

Answered: Olga owns two investments, A and B,…

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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You own two investments, A and B, that have a combined total value of $34,300.00. Investment A is expected to pay $860.00 per year forever; its next paymentis expected in 1 year; and its expected return is 6.09 percent per year. Investment B is also expected to make annual payments forever and make its next payment in 1 year. Investment B's next payment is expected to be $961.00 and all subsequent payments are expected to grow by 0.58 percent per year forever. What is the annual expected return for investment B? O 5.34% (plus or minus 3 bps) O 3.38% (plus or minus 3 bps) O 4.76% (plus or minus 3 bps) O 2.80% (plus or minus 3 bps) O none of the answers are within 3 bps of the correct answer
14. Alicia owns two investments, A and B, that have a combined total value of $31,300. Investment A is expected to pay $24,800 in 4 years from today and has an expected return of 12.72 percent per year. Investment B is expected to pay $27,100 in T years from today and has an expected return of 8.19 percent per year. What is T, the number of years from today that investment B is expected to pay $27,100? (Fall 2011, test 1, question 3) (Spring 2012, final, question 1) (Spring 2016, final, question 1) (Fall 2017, test 1, question 3) (Spring 2018, final, question 1)
Ralph has an investment worth $264,289.32. The investment will make a special payment of X to Ralph in 2 years from today. The investment also will make regular, fixed annual payments of $67,000.00 to Ralph with the first of these payments made to Ralph in 1 year from today and the last of these annual payments made to Ralph in 5 years from today. The expected return for the investment is 11 percent per year. What is X, the amount of the special payment that will be made to Ralph in 2 years? O $16,664.22 (plus or minus 10 dollars) O $20,531.99 (plus or minus 10 dollars) O $12,184.74 (plus or minus 10 dollars) O $74,370.00 (plus or minus 10 dollars) O none of the answers are within 10 dollars of the correct answer
QUESTION 1 Raul owns two investments, A and B, that have a combined total value of $27,500.00. Investment A is expected to pay $23,540.00 in 4 years from today and has an expected return of 12.40 percent per year. Investment B is expected to pay $23,722.38 in 6 years from today and has an expected return of R per year. What is R, the expected annual return for investment B? O 10.90% (plus or minus 10bps) O 13.22% (plus or minus 10bps) O9.45% (plus or minus 10bps) O 9.27% (plus or minus 10bps) O none of the answers are within 10bps of the correct answer
An investor paid $58,000 for an investment. He will get $5,780 for every two years (forever). What is his effective annual rate of return? a) 4.98% b) 9.97% c) 4.86% d) 0.00%
Algoe expects to invest $2,500 annually for 15 years to yield an accumulated value of $62,822.50 on the date of the last investment. For this to occur, what rate of interest must Algoe earn? (PV of $1, FV of $1, PVA of $1, and FVA of $1) Note: Use appropriate factor(s) from the tables provided. Round "Table Factor" to 4 decimal places. Future Value Annuity Payment Table Factor Interest Rate %
Your father paid $10,000 (CF at t = o) for an investment that promises to pay $575 at the end of each of the next 5 years, then an additional lump sum payment of $13,500 at the end of the 5th year. What is the expected rate of return on this investment? O a. 5.75% Ob. 4.26% O c. 10.37% O d. 11.33% Oe. 11.95%
Preeti has an investment that is worth 52,300 dollars and has an expected return of 3.6 percent. The investment is expected to pay her 22,800 dollars in 3 year(s) from today and X dollars in 8 year(s) from today. What is X?
You have just received a windfall from an investment you made in a friend's business. She will be paying you $32,711 at the end of this year, $65,422 at the end of next year, and $98,133 at the end of the year after that (three years from today). The interest rate is 11.2% per year. a. What is the present value of your windfall? b. What is the future value of your windfall in three years (on the date of the last payment)?
If Kimberly Young invests $19472.93 now and she will receive $54000 at the end of 9 years, what annual rate of interest will she be earning on her investment? {:[11%],[10%],[10.5%],[12%]:}
Steffi Derr expects to invest $5,000 annually that will earn 10%. How many annual investments must Derr make to accumulate $92,656 on the date of the last investment? (PV of $1. FV of $1. PVA of $1, and FVA of $1) Note: Use appropriate factor(s) from the tables provided. Round "Table Factor" to 4 decimal places. Future Value Annuity Payment Table Factor Annual Investments investments
If Magui will invest her money today worth 500,000 in JMC Mining company, how much is the expected annual net income if the money has an interest rate of 7% and yield of investment of 6% for 10 years? Annual income = (2 decimal places only)

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