please give me this answer this is one assignment have some required questions

Lottery payments

A major lottery advertises that it pays the winner $10 million. However this prize money is paid at the rate of $500,000 each year (with the first payment being immediate) for a total of 20 payments. What is the present value of this prize at 10% interest compounded annually?

Report your answer in $millions, rounded to two decimal places. So, for example, if you compute the answer to be 5.7124 million dollars then you should submit an answer of 5.71.

ans:

Relation between spot and discount rates

Suppose the spot rates for 1 and 2 years ares_1 = 6.3\%

s1

=6.3%ands_2 = 6.9\%

s2

=6.9%with annual compounding. Recall that in this course interest rates are always quoted on an annual basis unless otherwise specified. What is the discount rated(0,2)

d(0,2)?

Please submit your answer rounded to three decimal places. So, for example, if your

answer is 0:4567 then you should submit an answer of 0:457.

ans:

Relation between spot and forward rates

Suppose the spot rates for 1 and 2 years ares_1 = 6.3\%

s1

=6.3%ands_2 = 6.9\%

s2

=6.9%with annual compounding. Recall that in this course interest rates are always quoted on an annual basis unless otherwise specified. What is the forward rate,f_{1,2}

f1,2

assuming annual compounding?

Please submit your answer as a percentage rounded to one decimal place so, for example, if your answer is 8.789% then you should submit an answer of 8.8.

ans:

Forward contract on a stock

The current price of a stock is $400 per share and it pays no dividends. Assuming a constant interest rate of 8% per year compounded quarterly, what is the stock's theoretical forward price for delivery in 9 months?

Please submit your answer rounded to two decimal places so for example, if your answer is 567.1234 then you should submit an answer of 567.12

ans:

Bounds using different lending and borrowing rate

Suppose the borrowing rater_B = 10\%

rB

=10%compounded annually. However,

the lending rate (or equivalently, the interest rate on deposits) is

only8\%

8%compounded annually. Compute the difference between the upper

and lower bounds on the price of an perpetuity that pays \(A = 10,000\\)$ per

year.

Please submit your answer rounded to the nearest dollar so if your answer is23,456.789

23,456.789then you should submit an answer of23457

23457.

ans:

Value of a Forward contract at an intermediate time

Suppose we hold a forward contract on a stock with expiration6

6

months from now. We entered into this contract6

6months ago so that when we entered into the contract, the expiration wasT = 1

T=1year. The stock price$6

6months ago wasS_0 = 100

S0

=100, the

current stock price is125

125and the current interest rate isr = 10\%

r=10%

compounded semi-annually. (This is the same rate that prevailed6

6months ago.) What is the current value of our forward contract?

Please submit your answer in dollars rounded to one decimal place so if your answer is42.678

42.678then you should submit an answer of42.7

42.7.

ans:

please give me answers