1) A peculiar stock has alternated between earning a 9.1% rate of return and a -6.3% rate of return (loss) every 6 months for 5 years total. What was the total rate of return over these 5 years? ANSWER TO 4 DECIMALS PLEASE

2) A perpetuity will pay cash flows of $45.56, in real dollars, every year indefinitely starting next year. If the prevailing nominal interest rate is 5.8%, and the inflation rate is 3% (both forever), what is the present value of this perpetuity? ANSWER TO 4 DECIMALS PLEASE

Answer rating: 100% (QA)

1 To calculate the total rate of return over the 5year period we need to consider the alternating ra... View the full answer