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YOU MUST SHOW YOUR WORKINGS, INCLUDING THE TIME DIAGRAM, FORMULAS USED,AND CALCULATIONS. QUESTION 1 Suppose you are expecting to receive 30 equal regular payments of

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YOU MUST SHOW YOUR WORKINGS, INCLUDING THE TIME DIAGRAM, FORMULAS USED,AND CALCULATIONS. QUESTION 1 Suppose you are expecting to receive 30 equal regular payments of SAR250 per year from today. What is the value of the series of payments at 4.3% interest rate at year 10? QUESTION 2 If you were to receive SAR from today, what would be the sell to a friend if you expect the interest rate to be 5.5% for the next 20 years, 7% for the next 5 years, and 5% thereafter? 200 per year for the rest of your life fair price you would be willing to QUESTION 3 Calculate the value of a 55000-par-value bond paying quarterly interest at an annual coupon interest rate of 10% and having 10 years until maturity if the required return on similar-risk bonds is currently a 12% annual rate paid yearly QUESTION 4 Expectations theory suggests that the shape of the yield curve reflects investors' expectations about the future direction of inflation and interest rates Explain this statement and show what is meant by the "future direction of inflation and interest rate" QUESTION 5 Given that the interest rate is 5%, what is the price of a stock that pays dividend of SAR50 per year for 10 years and after 10 years the dividend grows at a constant rate of 3%? QUESTION 6 Suppose you own a stock that pays yearly dividend of SAR40 today. You expect the dividend to grow at 3% per year. If you plan tosel the bond 5 years from now, what will the price be if the interest rate is 5%

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