Investment opportunity the guarantee

Assignment Help Financial Management
Reference no: EM131583505

You are offered an investment opportunity the "guarantee" that your investment will double in 5 years. Assuming annual compounding, what annual rate of return would this investment provide? Show your work in excel using the excel functions. Show your answer in percentage format to 2 decimal points.

Reference no: EM131583505

Questions Cloud

Inflation cross-product and expectations theory : An analyst is evaluating securities in a developing nation where the inflation rate is very high. what is the yield on a 4-year security with no maturity,
What is default risk premium on the corporate bonds : A company's 5-year bonds are yielding 8% per year. what is the default risk premium on the corporate bonds?
What is the default risk premium on corporate bond : Assume that the liquidity premium on the corporate bond is 0.5%. What is the default risk premium on the corporate bond?
What is the real risk-free rate of return : what is the real risk-free rate of return? What is the yield on 3-year Treasury securities?
Investment opportunity the guarantee : You are offered an investment opportunity the "guarantee" that your investment will double in 5 years.
Calculate the historical return for each stock for each year : Calculate the historical return for each stock for each year. Use your findings in part b to calculate the average portfolio return over the 5 years.
Pay him now as fee for locating the new account : You have $1,000 invested in an account that pays 16% compounded annually. you should be willing to pay him now as a fee for locating the new account?
Trade-off faced by banks in liquidity management : What are the various approaches to managing the credit risk of a FI’s portfolio? Describe the trade-off faced by banks in liquidity management?
Present value of stream of ordinary annuity cash flows : The present value of a stream of ordinary annuity cash flows of $20 per year is $100 when valued utilizing a 15% annual rate.

Reviews

Write a Review

Financial Management Questions & Answers

  Repaid in equal annual installments

If the center takes out a 5-year term loan that would be repaid in equal annual installments, how much will it owe to Bank South if Gary decides to pay off the loan early at the end of third year. Amount borrowed 250, 0000 and rate 8.06

  Historical returns for the past three years

Company A's historical returns for the past three years are: 6.0%, 15%, and 15%. Similarly, the market portfolio's returns were: 10%, 10%, and 16%. Suppose the risk-free rate of return is 4%. What is the cost of equity capital (required rate of retur..

  Find the some ratio analysis for disney for 2014

Find the some ratio analysis for Disney for 2014. Would you be able to help me complete some of the other answers and check if the ones I've done are correct?

  Suppose the price of the underlying security rises

Explain the shape of your diagram. Now suppose the price of the underlying security rises.

  New debt and used this to buy back stock-after the recap

ABC Printing Inc. raised $140 million in new debt and used this to buy back stock. After the recap, ABC's stock price is $7.6. If ABC had 70 million shares of stock before the recap, how many shares, in millions, does it have after the recap? (Enter ..

  Effective rate of interest

Find the interest rates earned on each of the following. You borrow $710 and promise to pay back $781 at the end of 1 year. You borrow $82,000 and promise to pay back $293,821 at the end of 7 years.

  Larger the standard deviation of returns of an investment

The larger the standard deviation of returns of an investment, ______

  Portfolio consisting of multiple securities

The portfolio weights for a portfolio consisting of multiple securities given multiple states of the economy are based on the:

  What is net profit per share when futures contract expires

An arbitrage opportunity exists. What is the net profit per share when the futures contract expires?

  Do you believe this is good investment

If you require a rate of return on this stock of 18 percent, do you believe this is a good investment at the current price of $35?

  Stock index and one bond index

Choose one stock index (or one sector index) and one bond index. Go to yahoo/Finance and download 5 years of monthly data into your Excel for each stock index (Sector index) and bond index. Calculate the monthly rate of return (P1-P0/P0) for stock an..

  Expect the daily return correlation to change

Stock X was just added to the Dow 30 Index. Prior to the addition, the correlation between the daily returns of X and the other 29 stocks in the Index was +0.40. How do you expect the daily return correlation to change after X is added to the Dow 30 ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd