# Lavestments will have the real the years assume that

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lavestments will have the real the years Assume that the effective rate for all events that Investment Apays \$250 at the beginning of every year for a ll of paymes h Investment pays \$125 at the end of every 6-month period for the e yes of 20 pays) investment pays \$125 at the beginning of every 6 th the next 10 years of 20 payments) d investment pays \$2.500 at the end of 10 years of copy e investment Epays \$250 at the end of every year for the next 10 years total of payments) 6.
A Treasury bond promises to pay a lump sum of \$1,000 eactly 3 years from today. The nominal interest rate is 6% semiannual compounding. Which of the following statements is CORRECTT . The periodic interest rate is greater than 3% b. The periodic rate is less than 3% The present value would be greater if the lump sum were discounted back for more periods d The present value of the \$1,000 would be smaller if interest were compounded monthly rather than semiannually dinary c. The PV of the \$1.000 lump sum has a higher present value than the PV of a 3-year, 5333 33 annuity 7. Which of the following statements are CORRECT, assuming positive interest rates and other things held constant? A 5 year, 5250

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