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An investment with an initial outlay of R500 000 generates five successive annual cash inflows of R75 000,R190 00,R40 000,R150 000 and R180 000 respectively. The internal rate of return (IRR) is
Year 3 return on investment is R45000, year 6 return is R90000, year 9 return is R115000. Interest rate is 11.59% and present value of outflows is R95000. what is the future value of cash inflows?
Consider Bond XYZ
Coupon rate: 9,75% per year
Yield to maturity: 11,4% per year
Maturity date: 15 April 2047
Settlement date: 29 November 2021
The clean price is
Find the accumulated value of an ordinary simple annuity of Rs 3 000 per year for 7 years, if money is worth j1=8%
26.
An investment of $15,000 is made for three years at 4.5%
compounded quarterly.
a)
Determine the maturity value of the investment.
b)
What is the amount of compound interest earned on the
investment?
Determine the future value of a $5,000 compound-interest Canada Savings Bond at 8.5%/a, compounded annually after each amount of time.
4 years
factors are given as
u = e^(σ sqrt(h))
, d = e^(−σ sqrt(h))
,
where σ denotes the volatility parameter and h stands for the length of a single period
in a tree.
3.1.1 What is the ratio Su/Sd? [2]
3.1.2 What is the (as simplified as possible) expression for the risk-neutral probability
of the stock price going up in a single step? [2]
3.2 Find the current price of a one-year, R110-strike American put option on a non-
dividend-paying stock whose current price is S(0) = 100. Assume that the continuously compounded interest rate equals r = 0.06. Use a two-period Binomial tree with
u = 1.23, and d = 0.86 to calculate the price VP(0) of the put option.
#340153 on Dec 2023