you recently invested $300,000 of your savings in a security issued by a large company. security agreement pays you 6.5% semi anually and 3% on quarterly basis. what is the total cash flow you expect to recieve from this investment, if compunded seminar for the first 3 years and on quarterly basis for 3 years separated itnlo the return on investment
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Expert's answer
2020-11-06T10:10:27-0500
If there is no discount rate, then the total cash flow we are going to receive:
300,000×(0.065×6+0.03×12)=225,000, which is less than the initial investment of 300,000.
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