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Use the following rates for Questions 17-20. Calculate 3 Calculate 1,2 Time 0y1y 1y1y 2y1y 3y1y 4y1y Rate 3.00% 5.01% 7.03% 9.06% 11.10% Consider an

Use the following rates for Questions 17-20.

  1. Calculate 3

  2. Calculate 1,2

Time

0y1y 1y1y 2y1y 3y1y 4y1y 

Rate

3.00% 5.01% 7.03% 9.06% 11.10%

  1. Consider an investment that will pay a cash flow of $1000 at t = 1. What is the value of this investment today (e.g., at t = 0)?

  2. Now consider an investment that will pay a cash flow of $1000 at t = 4. What is the expected value of this investment in exactly 1 year (e.g., at t = 1).

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