Question: Hi, I don't know if this should be considered as a question or 2 MCQs but I hope you could help me with it. Would
Hi, I don't know if this should be considered as a question or 2 MCQs but I hope you could help me with it. Would be thumbs up if it helps, tysm
1) Use the table for the question(s) below. Suppose the term structure of interest rates is shown below:
Term 1 year 2 years 3 years 5 years 10 years 20 years Rate
(EAR%) 5.00% 4.80% 4.60% 4.50% 4.25% 4.15%
The present value of receiving $1,000 per year with certainty at the end of the next three years is closest to:
A. $2,737
B. $2,733
C.$2,744
D. $2,723
2) Use the table for the question(s) below.
Suppose the term structure of interest rates is shown below:
| Term | 1 year | 2 years | 3 years | 5 years | 10 years | 20 years |
| Rate (EAR%) | 5.00% | 4.80% | 4.60% | 4.50% | 4.25% | 4.15% |
The NPV of an investment that costs $2,700 and pays $1,000 with certainty at the end of one, three, and five years is closest to:
A. 71.38
B. $1,665.62
C. 100.26
D. 21.47
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