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1. Suppose an investment costs $400 today. It produces a stream of equal payments of $210 at the end of each year for 5 years.
1. Suppose an investment costs $400 today. It produces a stream of equal payments of $210 at the end of each year for 5 years. Find the expected annual rate of return on this investment.
2.What is the present value of this cash flow stream: $300 at the end of 1 year, -$100 after 2 years, and $390 after 3 years if the appropriate interest rate is 5%?
3.Find the equivalent annual rate for nominal rate of 8% per year with quarterly compounding.
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