2FM week 9_a - one year with an annual yield of 2 a two...

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ADAPT Practice Problems provided by SALT Solutions *ADAPT questions have a difficulty definition on a scale from 1 to 10 with 1 representing easy and 10 representing very difficult. Week 9 Difficulty level*is 5.4405459 A company must pay liabilities of $1000, $2000 and $3000 at the end of years 1, 2, and 4 respectively. It has the following CD options available. A
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Unformatted text preview: one year with an annual yield of 2%, a two year with an annual yield of 3%, and a three year with an annual yield of 4%. It is anticipated these CD rates will continue to be the same over the three year period. Determine the minimum cost to the company today to match its liabilities exactly. A) 5480 B) 5610 C) 5240 D) 5540 E) 4540...
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