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You have calculated the value of an investment to be $100. If it costs $105, you should buy it. Select one: True False

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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Computing Present and Future Values Under Different Assumptions Determine the unknown variables in each of the four separate investment scenarios. Round the RATE to one percentage point (for example, enter 8.5 for 8.54444%). Round NPER, PV, and PMT to the nearest whole number. Use a negative sign only for an amount related to PMT. Investment 1 Investment 2 Investment 3 Investment 4 RATE Answer 7% 6% 1% NPER 10 Answer 4 24 PV $216,000 $9,000 Answer $21,600 PMT $(35,000) $(2,300) $(16,200) Answer TYPE End of period Beg. of period End of period Beg. of period
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Good afternoon, Could you please explain why the future value factor is 100. I understand why the percentage is 9.65 When I put in my calculator (1+r)^50= 100, it doesn't come out to 100. What does future value factor mean? From my understanding I should only be concerned with figuring out what the percentage rate was which is 9.65. Thank you
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A game of chance offers the following odds and payoffs. Each play of the game costs $200, so the net profit per play is the payoff less $200. Probability Payoff Net Profit 0.30 $400 $200 0.60 300 100 0.10 0 –200 1. What is the expected cash payoff? Note: Round your answer to the nearest whole dollar amount. 2. What is the expected rate of return? Note: Enter your answer as a percent rounded to the nearest whole number. 1.What is the variance of the expected returns? Note: In the calculation, use the percentage values, not the decimal values for the rates of return. Do not round intermediate calculations. Round your answer to the nearest whole number. 2.hat is the standard deviation of the expected returns? Note: Enter your answer as a percent rounded to 2 decimal places.
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