Question 1

I. Suppose Avoid Coping Enterprises buy a share for Ghc 500,000 and hold it for a year. During the course of the year they receive dividends of Gh40,000. At the end of the year they sell the share for Ghc 600,000. Compute the holding period return for this investment.

ii. You have won a prize of Ghc1,000,000 for a contest conducted by All Universities Worldwide. The interest rate is 15% and is paid for a period of 10 years. What will be the value(s) of the prize won? If the prize is paid annually, semi-annually, quarterly, and monthly.

iii. What is the value of a 10-year annuity of Ghc 2.5 million, with an interest rate of 20%. If interest is compounded annually, semi-annually, quarterly, and monthly.