3. Suppose the yearly market rate of return is 4%. Find the present value of an asset with yearly cashflows and the following characteristics: (i) at year zero, the cashflow is 0 (i.e., C(0) = 0); (ii) from year t = 1 to year t = 14, the cashflows are all $100 (i.e., C(t) = 100, for t = 1, ..., 14); (iii) In year t = 15, the cashflow is $1,100 (i.e., C(15) = 1, 100); (iv) from year t = 16 on the cashflow is $50 perpetually (i.e., C(t) = 50 for t = 16, 17, ...). Find the present value of such asset. 4. Suppose the yearly market rate of return is 5%. (a) Find the present value of a perpetuity that pays $10 at the end of even years and $15 at the end of odd years assuming we are pricing this asset at the beginning of 2020. (b) Assuming the same market rate of return, what is the price of the same perpetuity in 2021? 5. An investor earns 0.05% per trading day in her portfolio. In a year with 250 trading days, what will be the investors total return on her portfolio at the end of the year if she starts with $100 and she keeps re-investing all her earnings back every day in the portfolio? (Hint: You may want to consider your time period in days so T = 250. Thus, your goal is to find P250 - Po). PO