ou want to invest $1000. List at least two terms (variables) you would consider regarding your investment and explain how that will affect how much you will earn.
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You want to invest $1000. List at least two terms (variables) you would consider regarding your investment and explain how that will affect how much you will earn.
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- ou invest $1000at time t=0 and an additional $5000 at time t=1/2. At time t=1/2 you have $1300 in your account and at time t=1 you have $6100 in your account. Find the dollar-weighted rate of return rd and the time-weighted rate of return rt on this investment.You have calculated the value of an investment to be $100. If it costs $105, you should buy it. Select one: True FalseAssume that you were given $100,000 to invest in financial assets, discuss the following: Explain what your investment portfolio would look like. Share what you believe is your risk tolerance
- Consider an investment that pays off $700 or $1,400 per $1,000 invested with equal probability. Suppose you have $1,000 but are willing to borrow to increase your expected return. What would happen to the expected value and standard deviation of the investment if you borrowed an additional $1,000 and invested a total of $2,000? What if you borrowed $2,000 to invest a total of $3,000? Instructions: Complete the table below to answer the questions above. Enter your responses as whole numbers and enter percentage values as percentages not decimals (i.e., 23% not 0.23). Enter a negative sign (-) to indicate a negative number if necessary. Invest $1,000 Invest $2,000 Invest $3,000 Expected Value $ 1050 1200 $ $ 1300 Percentage 20 % 30 % 40 % Standard Deviation 300 600 900 Expected Return N/A Doubled TripledFour alternative designs are being considered for a pet-exercising treadmillI. The company's MARR is 18%. The cash flows associated with each are given in the following table. The Judas The Lancelot The Bella The Lilo $120,000 $50,000 $130,000 $141,000 $50,000 $13,000 $18,000 Capital Investment $160,000 Annual Revenues Annual Expenses $50,000 $50,000 $20,000 $15,000 $14,000 $15,000 $15,000 Refurbish at EOY 5 $23,000 $4,000 $23,000 $4,000 Market Value after 10 years $5,000 IRR ??? 21.8% 21.6% 17.7%Explain the importance of studying time value of money. Case study a. Let's say your friend offer simple investment. You are planning to buy an asset for RM 335. This investment is very safe. You would sell off the asset in three years for RM 400. You know you could invest RM 335 elsewhere at 10 percent with very little risk. What do you think of the proposed investment?
- • Examine present values, future values, and efficient market hypothesis. • Synthesize knowledge of basic tools of finance. Computing the present value: 1. You are thinking of buying a six-acre lot for $70,000. The lot will be worth $100,000 in 5 years. A. Should you buy the lot if r = 0.05? B. Should you buy it if r = 0.10? The asymmetric information problem:Consider the following cash flow. Calculate the rate of return for an investment of 1000 TL.If an investor invests her money in a project with a 10% annual return. What is her nominal rate of return after two years. What is her effective rate of return after two years.1) Do the calculations manually then check them using an online financial calculator. You may also use financial software. 2) In your deliverable, you need to describe the tool you used
- Assume that the price of real estate is determined by P=PV(all cash flows generated by the real estate). After you have graduated you work for some years and can save some money. You decide to invest in a house which you want to rent out for a rate of 12,000 pound per month. Assume that the rental rate will increase with 1.2% per year (which is 0.1% per month). (For the sake of simplicity, also assume that there are no further costs involved e.g. renovating or repair). a) As the market risk of renting out the house is low, you think that a discount rate of 5.5% (APR with monthly compounding) would be appropriate. What is the price of the house under the assumption that the cash flows from rent will last forever? b) If discount rate is 1% lower than 5.5% what is the price of the house? c) You want to make the valuation of the house more realistic by assuming that the time horizon for the valuation should be 50 years. Again, you assume that the house will generate SEK 12,000 rental…What would be the interest rate that would allow you to convert an investment from B/.5,000 to B/.20,227.79 in 10 years? (NOTE: Do this problem ONLY with Conversion Factor and the corresponding Excel Financial Function and remember to confirm your answer with the corresponding Cash Flow Table)You are evaluating five different investments, all of which involve an upfront outlay of cash. Each investment will provide a single cash payment back to you in the future. Details of each investment appears here: Calculate the IRR of each investment. State your answer to the nearest basis point (i.e., the nearest 1/100th of 1%, such as 3.76%). The yield for investment A is The yield for investment B is The yield for investment C is The yield for investment D is The yield for investment E is %. (Round to two decimal places.) %. (Round to two decimal places.) %. (Round to two decimal places.) %. (Round to two decimal places.) %. (Round to two decimal places.) C Data table Investment A B с D E Initial Investment $1,600 $10,000 $600 $3,400 $5,200 Future Value Print $3,120 $15,775 $2,923 $4,526 $8,789 End of Year 10 11 16 Done 3 (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) 12 D X