Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Answer briefly the following questions:
a) Write the formula of the Price-Earnings ratio and explain how a result of 11 should be interpreted.
b) Write the equation for the PV of 200.000₺ to be received two years later when the market interest rate is
c) Define the yield to maturity of a 4-year maturity bond whose face value will be repaid at the end of the
maturity.
d) Define the intrinsic value of a 2-year maturity bond whose face value will be repaid in equal installments.
Transcribed Image Text:Answer briefly the following questions:
a) Write the formula of the Price-Earnings ratio and explain how a result of 11 should be interpreted.
b) Write the equation for the PV of 200.000t to be received two years later when the market interest rate is
forecast as 17%.
c) Define the yield to maturity of a 4-year maturity bond whose face value will be repaid at the end of the
maturity.
d) Define the intrinsic value of a 2-year maturity bond whose face value will be repaid in equal installments.
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