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Notes: Round up to the nearest whole number (e.g., 5565.515566; 4564.4974564) (Required) Post-class 1: If you buy consols, which provides you interest 500 forever, what
Notes: Round up to the nearest whole number (e.g., 5565.515566; 4564.4974564) (Required) Post-class 1: If you buy consols, which provides you interest 500 forever, what is present value of all the future cash flow (the price of consols )? The first cash flow will occur one year later. The risk-free interest rate is 5%. 2. (Required) Post-class 2 100 100(1+10%) 100 (1 + 10%)"-1 0 1 2 n If you buy consols, which provides the above cashflows, what is present value of all the future cash flow (the price of consols )? The risk-free interest rate is 20% 3 (Required) Post-class 3 120 120 120 120 0 1 2 n Question: If the risk-free interest rate is 4%, what is the present value at time 0 of all these cash flows (risk free)
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