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Unformatted text preview: F301 Fall 2010 Page 1 of 5 F301  Financial Management 2010 Fall Problem Set 1 Solutions Total possible points = 36 1. ( Solve this problem using the y x key on your calculator, NOT the TVM keys. Show your work by writing out your calculations. ) You invested $3,000 in a mutual fund four years ago. The return on your mutual fund has been 11% per year. How much is in there now, at the end of four years? (3 points) ( ) 2. ( Solve this problem using the y x key on your calculator, NOT the TVM keys. Show your work by writing out your calculations. ) A real estate developer purchased a parcel of land in August 2005 for $540,000. Today, five years later, she sold the property for $685,590. What was the rate of return per year? (3 points) ( ) ( ) 3. ( Solve this problem using the y x key on your calculator, NOT the TVM keys. Show your work by writing out your calculations. ) Two years ago, I placed $5,000 in a risky hedge fund investment. In its first year, the value of my investment declined by 11.4% (a negative rate of return). In the second year, it earned a positive return of 2.4%. What was the average annual rate of return over the twoyear period? (Hint: First find the value at the end of the second year. Then use this value as the FV to find the annual rate of return.) (3 points) () ( ) F301 Fall 2010 Page 2 of 5 ( ) ( )...
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 Spring '10
 TINDALL
 Management

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