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1) Which of the given statements is most right?

a) The investment which compounds interest semi-annually and has the nominal rate of 10% will have the efficient rate less than 10%.

b) Future value of the 9 year $ 120 annuity due is less than present value of the 9 year $120 ordinary annuity. Suppose both annuities have similar risk and make one payment per year.

c) Present value of 6 year $120 ordinary annuity is $120 less than present value of the 7 year $120 annuity due. Suppose both annuities have same risk and make one payment per year.

d) Band Care correct

e) A and C are correct.

2) You study that stock X is trading for $50 and is down 50 percent for year. Stock Y is also trading for $50 but has increased 100 percent for the year. If investor had bought one share of each stock at starting of year, what can you conclude has occurred to value of the portfolio? Required to illustrate work.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M914010

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