Assume that the real risk free rate is constant at 1.5 %. The yield is 2.3% on 1-year treasury, 3.0% on 2-year treasury, 3.5% on 3-year treasury, and 5.0% on 5-year treasury securities. What is the expected rate on three year treasury securities, 2 years from now?

What is the expected rate on 3year treasury securities, 2 years from now? Show all the work with formula

71% of all bald eagles survive their first year of life. If 45 bald eagles are randomly selected, find the probability that

a. Exactly 32 of them survive their first year of life. ____
b. At most 35 of them survive their first year of life.____
c. At least 34 of them survive their first year of life.____
d. Between 29 and 36 (including 29 and 36) of them survive their first year of life.____

You are comparing two projects. One is a four-year project costing $1 million and will provide benefit of $500K/year. The second is an eight-year project with annual CFs of $500K/year and an initial cost of $1.5 million. If there is a 70% chance the cost of the first project will drop by 30% after the first four years and the remaining cash flows stay at $500K/year, which project is the better choice? The discount rate is 10%.

A floting rate mortgage loan is made for $100,000 for a 30-year period at an initial rate of 12 percent interest. However, the borrower and lender have negotiated a monthly payment of $800.00

What will the loan balance at the end of year 1?

What if the interest rate increases to 13 percent at the end of year 1? How much interest will be accrued as negative amortization in year 1 if the payments remains at $800? Year 5?

Find the present value of $4,543 discounted for 6 years at 13%. Assume quarterly compounding. (round to the nearest whole dollar)

Consider the following cash flows and calculate the Present Value of this cash flow stream if the interest rate is 6%.  Please include two decimals in your answer and a negative if appropriate

Year 0: $-285

Year 1: $133

Year 2: $0

Year 3: $0

Year 4: $457

An inflation-indexed Treasury bond has a par value of $5,000 and a coupon rate of 7 percent. An investor purchases this bond and holds it for one year. During the year, the consumer price index decreases by 1.5 percent first six months of the year, and by 2.25 percent during the second six months of the year due to a deflation. What are the total interest payments the investor will receive during the year?

TYPE ANSWER AND SHOW THE WORK

Roberto borrows $10,000 and repays the loan with three equal annual payments. The interest rate for the first year of the loan is 4% compounded annually; for the second year of the loan the interest rate is 5% compounded annually; for the third year of the loan the interest rate is 6% compounded annually.

a. Determine the size of the equal annual payments.


b. Would interchanging the interest rates for first year and third year change the answer to part a?

2. The firm is expected to distribute the following dividend over the follow years:

Year 1 D₁ = $1.5;

Year 2 D₂ = $2.0;

Year 3 D₃ = $2.2;

Starting from year 4, the dividend will be growing at 5% for two years, and then the growth rate will drop to 2%

1. List the annual dividend payment for year 4-8
2. Calculate the present value of the dividends as the price of the stock (as of today), assume the discount rate is 10%

You have to value a company based on its expected future cash flows. Interest rates are currently 9%. If this company expects cash flow of $100000 next year (it is the end of year 0 or equivalently the beginning of the first year), growing at 7.8% each year until the end of the fifth year. Then, cash flow growth is expected to slow to 1.9 forever-after. What is the value of this company today, in thousands of dollars?

Acme Manufacturing is producing $4,000,000 worth of goods this year and expects to sell $4,100,000. The firm actually sells $3,900,000 worth of goods. It is also planning on purchasing $2,000,000 in new equipment during the year. At the beginning of the year, the company has $400,000 in inventory stock in its warehouse.

Find:

Planned Investment, Actual Investment, Desired end of year inventories, actual end of year inventories, unplanned inventory investment, Y, E