FIN 4317-Practice Problems 1 1) S10,000 is invested in a portfolio which is worth $16,500 8.5 years later. What is the 8.5-year HPR? What is the (geometric) average annual rate of return? Round to 3 decimals: xx.yyy% or.xxyyy An investment over 5 years has an HPR of-75% in the first year, +7.5% in the second, +3.1% in the third, +1.2% in the fourth year, and +1.8% in the 5th 2) a) Calculate the average annual compound rate of return over this 5-year holding period. Round to 3 decimals. xxyyy% or .xxyyy b) What is the simple average of the annual HPRs? c) Suppose you had invested $500 in this investment at the start. What would your investment have been worth at the end of the 2nd year? 3) A portfolio starts out worth $1200. After the first year, is worth $1320. After the , it's worth S1,359.60. After the 3d year, it's valued at $1,393.59. In the 4th year, it earns an HPR of 5.35%. a) What is this portfolio worth at the end of the 4th year? b) What is its average annual rate of return? 4) Overall a certain holding period, a stock falls from $30 to $27.50, and pays a dividend of S1.755. What is its HPR for that period? 5) Calculate the monthly payment you'd make on a mortgage of $550,000 if the (annual) interest rate is 3.875% and the term of the loan is 30 years