SEE IMAGE BELOW, Find P(A), P(B), and P(C), P(A ∪ B), Ac, Cc, P(Ac) and P(Cc), A ∪ Bc and P(A ∪ Bc), and P(B ∪ C). NOTE: This is a handwritten explanation only, no calculator possible: just follow the example.
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These were the problems I said I would post on the site. Look them over before the test. Good look.
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Calculate the prices of bonds given their coupon rates, maturities, and yield to maturity (YTM) for bonds with annual coupon payments and a specific par value.
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Determine the present value of incremental cash inflows over a specified time period for an investment project when given the cash inflow amounts and the cost of capital.
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Determine the ending investment balance after a specified time period, considering regular annual contributions and an average return rate, and the first investment is made immediately.
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Determine the future value of a given investment amount after 3 years for different interest rate scenarios with an EAR, quarterly compounding APR, and monthly compounding APR.
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Calculate the Effective Annual Rate (EAR) for a money market account with a given APR at different compounding intervals, including annual, monthly, weekly, and daily.
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Assess the financial implications of assisting a relative through medical school, considering their yearly financial needs, repayment amounts during residency, and subsequent repayments after becoming a qualified doctor, given a specific interest rate and assuming no risk.
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A foundation plans to offer an annual scholarship indefinitely, starting a year from now. Upon receiving the scholarship, a student will get a certain amount annually for a set period. After this period, the student must repay the total amount received in equal yearly installments without interest, starting a year after the scholarship ends. Essentially, the foundation is providing an interest-free loan disguised as a scholarship. Given a constant interest rate for all maturities, the task is to determine the initial investment amount the foundation needs to fund all future scholarships.
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Determine the total rate of return from holding a bond for a year, given its par value, coupon rate, and initial yield to maturity. Evaluate the return under scenarios where the yield to maturity remains constant and when it changes upon selling.
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