Suppose the present value of 524 paid at the end of one


1-Suppose the present value of $524 paid at the end of one year is $495. What is the one-year discount rate?

2-The current price of a bond is $952.40. Its price next year is $925.90. What is the discount factor?

3-You purchase a two-year $1000 face value bond at par. The bond has a 6% coupon rate. However, do to cash flow problems; the company misses the first coupon payment, but pays both coupons payments in year 2. What is your rate of return?

4. Using the information, in the previous question, suppose the company pays all of the coupon payments on time. What is your rate of return?

5. Someone offers you the following deal. They will pay you $5000 in two years if you agree to pay them $4500 today. If you accept the deal, what is your rate of return?

6. Assume the future value of $550 paid at the end of one year is $675. What is the growth factor?

7. Assume the present value of $262 paid at the end of one year is $195. What is the one year discount factor?

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Financial Management: Suppose the present value of 524 paid at the end of one
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