1. Consider the following cash flows:
cash flow 0 $(6,750)
cash flow 1 $4,500
cash flow 2 $18,000
Calculate the net present value of the above project for discount rate of 15%.
(round answer to nearest whole dollar)
2. Extra Credit Section.
After applying the regression model to the monthly data when assessing its interest rate risk, Belleville Bank determines that the model's interest rate regression coefficient is equal to -3. What does this number imply?