If the 1-year rate of return is 20% and the interest rates are constant, what is the 5-year holding rate of return?

Q 2-11

If you invest $2,000 today and it earns 25% per year, how much will you have in 15 years?

 

Q 2-46

Your stock costs $100 today, pays $5 in dividends at the end of the period, and then sells for $98. What is your rate of return?

 Q 2-49

The interest rate has just increased from 6% to 8%. How many basis points is this?

Q 2-50

Over 20 years, would you prefer 10% per annum, with interest compounding, or 15% per annum but without interest compounding? (That is, you receive the interest, but it is put into an account that earns no interest, which is what we call simple interest.)

A project has the following cash flows in periods 1 through 4: -$200, +$200, -$200, +$200. If the prevailing interest rate is 3%, would you accept this project if you were offered an upfront payment of $10 to do so?

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