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What is the future value of $[PV] if we invest this amount f…

What is the future value of $[PV] if we invest this amount for [T] years at an interest rate of [IY]%?

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Suppose you go to a local bank to borrow $[PV] and repay it…

Suppose you go to a local bank to borrow $[PV] and repay it in [T] years. The bank will charge you an effective annual rate of [IY]%. What is the annual payment needed to repay the loan?

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Suppose you are a rich philanthropist and you aim to provide…

Suppose you are a rich philanthropist and you aim to provide $[CF] a year in perpetuity, starting [T] years from now. Assuming that the discount rate is [IY]%, what is the present value of the perpetuity?

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Suppose you buy a three-year zero-coupon bond with $100,000…

Suppose you buy a three-year zero-coupon bond with $100,000 face value for $[PV]. What is the effective annual YTM for this bond?

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You have been offered an opportunity to purchase a growing p…

You have been offered an opportunity to purchase a growing perpetuity. The first payment of $[CF] will occur two years from now, and the payments will start growing at a rate of [g]% per year indefinitely starting in year 2. If the discount rate is [IY]%, what is the present value of this perpetuity?

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A machine costs $[I] and is expected to produce the followin…

A machine costs $[I] and is expected to produce the following cash flows:  Year 1: [CF1] Year 2: [CF2] Year 3: [CF3] Year 4: [CF4] If the discount rate is [IY]%, what is the machines’ NPV?

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Suppose another asset pays $[CF1] at the end of the first ye…

Suppose another asset pays $[CF1] at the end of the first year and $[CF2] at the end of the fifth year. Assuming a discount rate of [IY]%, what is the price of this asset (i.e., the PV)?

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Consider the following two stocks:    Stock A (%) Stock…

Consider the following two stocks:    Stock A (%) Stock B (%) Risk-free Rate (%) Expected Return [ERA] [ERB] [RF] Standard Deviation  [sA] [sB] 0.0   What is the Sharpe ratio of a portfolio that invests [wA] in stock A and (1 – [wA]) in stock B is the correlation between them is [correlation]?

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Based on historical data, Target has a [rt]% expected annual…

Based on historical data, Target has a [rt]% expected annual return and [sdt]% standard deviation while Berkshire Hathaway has a [rb]% expected return and a [sdb]% standard deviation. Assume the correlation between the returns of these companies is [corr]%. What is the expected return of your portfolio if you split your money evenly between Target and Berkshire?

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You are evaluating a project that will cost $500,000, but is…

You are evaluating a project that will cost $500,000, but is expected to produce cash flows of $125,000 per year for 10 years, with the first cash flow in one year. Your cost of capital is 11% and your company’s preferred payback period is three years or less. What is the payback period of this project?

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