Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Question
Acme Insurance is offering you a perpetuity that will pay you and your heirs $500,000 per year forever. If the perpetuity costs $7,500,000, what is the compound annual rate of return on this investment?
Question 16 options:
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11.00%
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6.67%
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5.00%
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9.50%
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7.50%
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- If you require a 12% annual return on your investments, would you prefer S20, 000 six years from today or an annuity paying Sl, 800 at the beginning of each year for 13 years. a. The annuity paying Sl, 800 at the beginning of each year for 13 years.b.The annuity paying Sl, 600 at the beginning of each year for 15 years.c.The S20, 000 six years from today d.The S20, 000 five years from todayarrow_forwardi need the answer quicklyarrow_forwardQUESTION 5 Carl plans to retire in 4 years with $519,000.00 in his account. If he receives payments of $114,705.29 per year and he receives his first $114,705.29 payment in 4 years and his last $114,705.29 payment in 8 years, then what is the expected annual return for his account? O 12.91% (plus or minus 1 bps) O 3.43% (plus or minus 1 bps) O 5.26% (plus or minus 1 bps) O 8.71% (plus or minus 1 bps) O none of the answers are within 1 bps of the correct answerarrow_forward
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