obi owns a perpetuity that will pay $1,000 a year, starting one year from now. He offers to sell you all of the remaining payments after the first 25 payments have been paid. What price should you offer him for payments 26 onward if you desire a rate of return of 7.5 percent?

You are the beneficiary of a life insurance policy. The insurance company informs you that you have two options for receiving the insurance proceeds. You can receive a lump sum of $400,000 today or receive payments of $16,000 a year for 15 years. You can earn 6 percent on your money. Which option should you take and why?

A man can sell his business for $800,000 cash or for $125,000 plus $12'I a. Find the present value of the annuity that is offered if money is worth 10%; compounded annually. b. If he takes the $800,000, spends $125,000 of it, and invests the rest in a 9-year annuity at 10%, compounded annually, what size annuity payment will he receive at the end of each year? c. Which is better, taking the $125,000 and the annuity or taking the cash settlement? a. Find the present value of the annuity that is offered if money is worth 10%, compounded annually. (Type an integer or decimal rounded to the nearest cent as needed.)

Select all that are true with respect to historical data on risk and return in the U.S. financial markets since about 1926, Group of answer choices A portfolio of small stocks has earned higher returns than large stocks, with less risk A portfolio of small stocks has earned higher returns that large stocks, with higher risk Stocks have outperformed government bonds, albeit with higher risk With respect to a diversified stock portfolio, the longer the holding period, the higher the risk. With respect to a diversified stock portfolio, the longer the holding period, the lower the risk.