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Mike and Emily each have invested $100,000 in an investment account. No other contributions will be made to their investment account. Both have the same
- Mike and Emily each have invested $100,000 in an investment account. No other contributions will be made to their investment account. Both have the same goal; they each want their account to reach $3,000,000 at which time each will retire. Mike has his money invested in risk-free securities with an expected return of 12% compounded monthly. Emily has her money invested in a stock fund with an expected return of 15% compounded quarterly. How many years after Emily retires will Mike retire? (6 marks)
2. You expect to receive $15,000 at graduation in three years. You plan on investing it at 13% until you have $106,000. How long will you wait from now? (4 marks)
3. Cox Co. issued 10-year bonds a year ago at a coupon rate of 6%. The bonds make semi-annual payments. If the face value is $1000 and YTM on these bonds is 5%, what is the current price of the bond? (4 marks)
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