Question

In: Finance

In 1987, a Van Gogh’s painting Sunflowers was auctioned for $36m. In 1889, 98 years earlier,...

In 1987, a Van Gogh’s painting Sunflowers was auctioned for $36m. In 1889, 98 years earlier, it had sold for $125. What was the IRR of buying it in 1889 and selling it in 1987?

Solutions

Expert Solution


Related Solutions

Brad owns a Van Gogh masterpiece worth $5 million. There is a 1% chance the painting...
Brad owns a Van Gogh masterpiece worth $5 million. There is a 1% chance the painting will get stolen, leaving Brad with nothing. What is the expected value of this gamble? What is the minimum insurance premium an insurance company would charge to fully insure the painting against theft? (Note: minimum insurance premium = fair insurance premium = Expected loss) Brad's certainty equivalent for this risky situation is $4,900,000. What is the maximum insurance premium he'd be willing to pay...
Jules owns a Van Gogh masterpiece worth $5 million. There is a 1% chance the painting...
Jules owns a Van Gogh masterpiece worth $5 million. There is a 1% chance the painting will get stolen, leaving Jules with nothing. (a) What is the expected value of this gamble? (b) What is the minimum insurance premium an insurance company would charge to fully insure the painting against theft? (c) Jules's certainty equivalent for this risky situation is $4,900,000. What is the maximum insurance premium he'd be willing to pay for full insurance?
In January of 2016, the average price of an asset was $28,558. 7 years earlier, the...
In January of 2016, the average price of an asset was $28,558. 7 years earlier, the average price was $20,808. What was the annual increase in the selling price? Multiple Choice -4.42% 4.63% 4.16% 5.55% 5.09%
In 1987, Roy leased real estate to Drab Corporation for 20 years. Drab Corporation made significant...
In 1987, Roy leased real estate to Drab Corporation for 20 years. Drab Corporation made significant capital improvements to the property. In 2006, Drab decides not to renew the lease and vacates the property. At that time, the value of the improvements is $800,000. Roy sells the real estate in 2018 for $1,200,000 of which $900,000 is attributable to the improvements. When is Roy taxed on the improvements made by Drab Corporation? Lee, a citizen of Korea, is a resident...
Why Vietnam poor country twenty years ago?Explain growth of Vietnam economy since 1987
Why Vietnam poor country twenty years ago?Explain growth of Vietnam economy since 1987
Carl and Cassia need to replace a delivery van in 3 years. The cost of delivery...
Carl and Cassia need to replace a delivery van in 3 years. The cost of delivery vans is $23,000 today, and is expected to grow 5% a year over the next 3 years. If Carl and Cassia have saved $4,500 towards the van already, how much per month do Carl and Cassia need to save, if they think they can earn 7% per year on their savings, to pay for the new van 3 years from now? $528 $805 $185...
An investor bought a stock for $85 and sold it exactly 2 years later for $98....
An investor bought a stock for $85 and sold it exactly 2 years later for $98. He received two dividend payments of $3 each during his holding period (the first at the end of the first year and the second, just before he sold his shares). The re-investment rate was 5% per year. Calculate the following: The investor's capital gain: $    The future value of his reinvested dividends: $ The investor’s annual realized rate of return(ROR):
The mean annual inflation rate in the United States over the past 98 years is 3.37%...
The mean annual inflation rate in the United States over the past 98 years is 3.37% and has a standard deviation of approximately 5%. In 2018, the inflation rate was below 1.9%. If the annual inflation rate is normally distributed, what is the probability that inflation rate will be below 1.9% in 2019?
Penny sold 400 shares of RBC for $78, that she paid $82 for 4 years earlier....
Penny sold 400 shares of RBC for $78, that she paid $82 for 4 years earlier. She received $1 .30 of dividends per share each year. calculate simple and compound holding period returns.
Year years since 1971 number of new locations 1971 0 1 1987 16 17 1988 17...
Year years since 1971 number of new locations 1971 0 1 1987 16 17 1988 17 33 1989 18 55 1990 19 84 1991 20 116 1992 21 165 1993 22 272 1994 23 425 1995 24 677 1996 25 1015 1997 26 1412 1998 27 1886 1999 28 2498 2000 29 3501 2001 30 4709 2002 31 5886 2003 32 7225 2004 33 8569 2005 34 10241 2006 35 12440 2007 36 15011 2008 37 16680 2009 38 16635...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT