See attached document. I only need 2, 4, 8, and 10 done

Assignment 5 Modules 1 - 5 Spring 2014 Math 183 1. An investor makes payments of 8000 at times 0 and t and receives returns of 900 at times 1, 2, 3, ... , 25. The internal rate of return on this cash-flow is an effective periodic rate of 5%. Find t. Round your answer to the nearest whole number. Answer: __________________ 2. An investment fund has a balance of 100 at the beginning of the year and of 145 at the end of the year. A 30 contribution to the fund is made at time t = 1/3. The balance just prior to this contribution is 105. Let the annual dollar-weighted rate of return be D% and let the annual timeweighted rate of return be T%. Find D + T. Give your answer as a percentage rounded to two decimal places. Answer: __________________ 3. An investor pays 100000 today for a 4-year investment that returns cash-flows of 60000 at the end of each of years 3 and 4. The cash-flows can be reinvested at 4.0% per year effective. If the preferred rate of interest at which the investment is to be valued is 5.0% per year effective, then what is the net present value of the 4-year investment today? Note: The cash-flows get reinvested at a particular interest rate. Round your answer to the nearest whole number. Answer: __________________ 4. You are given the following information about an investment account: Date Value Immediately Before Deposit Deposit January 1 10 July 1 12 X December 31 2X Over the year, the time-weighted rate of return is 20%, and the dollar-weighted rate of return is Y%. Calculate Y. Give your answer as a percentage rounded to one decimal place. Answer: __________________ 5. On January 1, 1997, an investment account is worth 100000. On April 1, 1997, the value has increased to 103000 after which 8000 is withdrawn. On January 1, 1999 the account is worth 103992. Assuming a dollar-weighed method for 1997 and a time-weighted method for 1998, the annual effective interest rate was equal to i% for both 1997 and 1998. Calculate i. Note: I worked with time measured in months. Give your answer as a percentage rounded to two decimals place. Answer: __________________ 6. Dan invests 5000 into a fund at time 0 and receives payments of 600 at the end of periods 1 - 3, and a payment of 650 at the end of period 4, a payment of 700 at the end of period 5, a payment of 750 at the end of period 6, increasing each payments size by 50 each period, resulting in a payment of 1050 at the end of period 12. Suppose that this investment is being valued using a preference interest rate of 4% per period effective. Find the net present value of this investment. Give your answer rounded to the nearest whole number. Note: This boils down to an increasing annuity problem, and you could solve it out using formulas, but you should practice using the Cash-Flow Worksheet built into the Financial Calculator. For \"small\" numbers of payments (i.e. less than 10 or so), it may be faster to do out calculations in the calculator as opposed to hand calculations...just a good tip to know! Answer: __________________ 7. The Macaulay duration of a 10 year $100 par value bond with annual coupons of $X is 6.96 years at an annual effective interest rate of 10%. Calculate X. Give your answer as a decimal rounded to two places. Answer: __________________ 8. You have the following information on two portfolios. Portfolio A consists of a 1000 par-value 4-year bond with 7% annual coupons and a 5-year zero-coupon bond with a par-value of X. Both bonds redeem at par. Portfolio B consists of a single 4-year zero-coupon bond with maturity value of 10000. All bonds yield an annual effective rate of 7%. The portfolios both have the same volatility (i.e. modified duration). Find the X. Give your answer rounded to the nearest whole number. Answer: __________________ 9. The following table gives the pattern of investment year rates over a three-year period and where m = 2 years is the time after which the portfolio interest rate method is applicable on an investment. Calendar Year of Original Investment y Investment Year Rates y i1 z z+1 z+2 y i2 9.00% 10.00% 7.00% 8.00% 5.00% Portfolio Rates i Calendar Year of Portfolio Rate y + 2 11.00% z+2 y 2 Frank invests 1000 at the beginning of each of calendar years z, z + 1, z + 2. What is the total amount of interest credited to Frank's account for calendar year z + 2? Round your answer to the nearest whole number. Answer: __________________ 10. Using the table from problem (9). An investment of 1000 is made at the beginning of each of calendar years z, z + 1, and z + 2. What is the average annual effective time-weighted rate of return for the three year period? Give your answer as a percentage rounded to one decimal place. Hint: Find the absolute growth over this three year period and then from there you can take this three-year effective growth rate and \"translate\" it into a one-year effective growth rate. Answer: __________________