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Problem: Contract 1: You will get from a bank $4 million every 3 years, starting in 9 years and so for the next 21 years
Problem: Contract 1: You will get from a bank $4 million every 3 years, starting in 9 years and so for the next 21 years Payments will grow at a rate of 5% each period. The interest rate is 20% APR quarterly compounded. Contract 2: You will receive a perpetuity starting today but payments are made every 2 years. The interest rate is 18% monthly compounded. Which contract provides better outcome? Question: Explain the difference between the primary and secondary markets and how investment banks play a role
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