HW _1 Fall 2010 - F370 Homework #1 Opens: Sept 2nd at 3pm...

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F370 Homework #1 Opens: Sept 2 nd at 3pm Closes: Sunday Sept 5 th at 11:55pm 1. A contract features a lump-sum future flow of $46,000 three years from today. If you can now purchase that flow for $42,201.84, then what annual implied return would you earn on this contract? A. 2.9% B. 9.0% C. 8.8% D. 7.9% 7.9% 2. What is the present value of the following uneven stream? 240 795 628 179 r = 11.5% 0 1 2 3 A. $1,839 B. $1,587 C. $1,424 D. $1,347 7.9% 3. Suppose that you grow money in an account for four years at a return rate of 10%. Then this future amount is later invested for another four years. If your money triples by the end of the eight years total, then (to one decimal) what rate of return did you earn over the latter four years? A. 9.4% B. 12.7% 1
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C. 16.8% D. 19.7% 7.9% 4. Which of the following contracts is NOT an example of a debt contract in terms of how finance defines debt? A. A Corporate Bond B. A share of Preferred Stock C. An Options Contract D. A Car Lease E. All the above contracts are debt contracts
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This note was uploaded on 11/05/2010 for the course BUS F370 taught by Professor Tom during the Spring '10 term at Indiana Institute of Technology.

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HW _1 Fall 2010 - F370 Homework #1 Opens: Sept 2nd at 3pm...

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