5. An asset is expected to pay $400, $300, and $500 respectively at the end of Year 1, Year 2, and Year 3. Assume that the market interest rate on assets of similar risk is 8%. a) What is the opportunity cost of investing in this asset? Explain. b) What should be the market price of this asset? Show calculations. c) If you purchase the asset now, at the price calculated above, calculate your expected the rate of return on the asset for Year 1, and check if it is the same as the discount rate used in Part (b). d) What is the expected rate of return from this asset for Year 2? e) What do you learn from above about the relation between the discount rate used in asset valuation and the expected return from the asset? 5. An asset is expected to pay $400, $300, and $500 respectively at the end of Year 1, Year 2, and Year 3. Assume that the market interest rate on assets of similar risk is 8%. a) What is the opportunity cost of investing in this asset? Explain. b) What should be the market price of this asset? Show calculations. c) If you purchase the asset now, at the price calculated above, calculate your expected the rate of return on the asset for Year 1, and check if it is the same as the discount rate used in Part (b). d) What is the expected rate of return from this asset for Year 2? e) What do you learn from above about the relation between the discount rate used in asset valuation and the expected return from the asset