Question
Question 1 [5 pts] Suppose that you have purchased an investment product that makes an annual payment of $2,000 at the end of year for
Question 1 [5 pts]
Suppose that you have purchased an investment product that makes an annual payment of $2,000 at the end of year for next five years. Assume a discount rate of 4% is applicable to similar investment alternatives. Answer questions (a) and (b) below.
- How much would you be willing to pay for the product?
Answer (show the steps/calculation toward your results):
- Suppose the investment product will make a payment of $1,000 every six months for next five years, with the first payment to be made in six months from today. How much would you be willing to pay?
Answer (show the steps/calculation toward your results):
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The Handbook Of Alternative Assets
Authors: Peter Temple
1st Edition
161477076X, 978-1906659219
