1. If the market price today of a $1,000 cash flow in 2 years is $925, what is the implied rate of discount?

2. If the market price today of a $1,000 cash flow in 4 years is $925, what is the implied rate of discount?

3. If the market price today of a $1,000 cash flow in 2 years is $925, what is the implied rate of discount, compounded quarterly?

4. If the market price today, Sept 18, of a $1,000 cash flow in 2 months is $995, what is the implied rate of discount?

Extra Credit. You invest $1,000 Monday, Sept 1, for a week at 1.25%. Because Monday the 8th is a bank holiday, you will not receive your proceeds until the next day, for which interest will not be paid. What is your effective rate (the annualized rate you really received)?

How to solve by hand?