Question: Part D (Written Response 8 marks) Question 23 (3 points} A financial engineer designs a new financial instrument that he calls, the Simplex This instrument

Part D (Written Response 8 marks) Question 23 (3 points} A financial engineer designs a new financial instrument that he calls, the Simplex This instrument gives the holder access to the following cashflows: - For the first 6 years, the holder receives $100 per year starting today (a total of 7' payments) - The holder does not receive any cashflows for years 7 and 8. - Starting at the end of year 9, the holder receives $75 growing at a rate of 9% per year forever - The holder has to pay a \"service fee" of $15 every year starting at the end of year 4; this goes on forever. The prevailing discount rate throughout is 10% The financial engineer would like to determine a fair market price for this financial instrument, what do you suggest this price to be? IIII

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