Name:
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lVIath 3340: Introduction to Fixed Income NIathematics
Mid-Term Exam 2
Thursday, November 14. 2013
Points Obtained
Total points obtained: Problem 1 (15 points) Suppose you and your friend invest $3000
in fund A andfuud B r
Math 3340: Introduction to Fixed Income Mathematics
Homework 7, due on Thursday, November 7, 2013
Second mid-term is on Thursday, November 14, 2013 (in class)
Problem 1. If an investment has a growth factor ft , then show that the doubling time td for
the
Math 3340: Introduction to Fixed Income Mathematics
Homework 6, due on Thursday, October 31, 2013
Problem 1. Suppose that two years you bought 500 shares of for $63 per share.
At the same time, your friend bought 300 shares of for $72 per share. You and
y
Math 3340: Introduction to Finite Income Mathematics
Homework 3, due on Tuesday, October 1, 2013
Problem 1 Suppose you borrowed $15000 to buy a car at an interest rate 0.6%
per month. What will the monthly payments be on loans of 36, 48 and 54 months?
Pro
Math 3340: Introduction to Fixed Income Mathematics
Homework 5, due on Thursday, October 24, 2013
Problem 1 An insurance company will sell you an annuity paying $30, 000
each 10/10 starting next year for 20 years with a discount factor 0.98. What is
the I
Math 3340: Introduction to Finite Income Mathematics
Homework 4, due on Tuesday, October 15, 2013
Problem 1 At what interest rate convertible semi-annually would $2000 accumulate to $2800 in seven years?
Problem 2 Find the length of time(in years) necessa
Math 3340: Introduction to Fixed Income Mathematics
Homework 2, due on Thursday, September 19, 2013
Problem 1.
i
d
(i) Show that the force of interest t is equal to the force of discount t .
(ii) Assuming that the force of interest t in the case of compou
Math 3340: Introduction to Fixed Income Mathematics
Homework 1, due on Thursday, September 12, 2013
Problem 1. Let i be the constant rate of simple interest. Show that the eective rate of interest
for the nth period is
in =
i
.
1 + (n 1)i
Is in an increas