1. If the effective annual rate for all investments is same and greater than zero, which of the following investments would have the lowest present value?
a) This investment pays $250 at the beginning of each year for 10 years.
b) This investment pays $2,500 at the end of every year for 10 years.
c) This investment pays $1,500 at the beginning of every year for 10 years.
d) This investment pays $250 at the end of each for 10 years.
2. If the effective annual rate for all investments is the same and greater than zero, which of the following investments would have the lowest present value?
a) This investment pays $250 at the beginning of each year for 10 years.
b) This investment pays $1,500 at the beginning of every year for 10 years
c) This investment pays $250 at the end of each for 10 years.
d) This investment pays $2,500 at the end of every year for 10 years.
3. Consider the information below for Calson Corporation. Suppose that the expected inflation rate and the inflation premium increase by 2.0 percentage points, and Calson acquires risky assets that increase its beta by the indicated percentage. What is the firm's new required rate of return? Beta: 1.50 Required return (rs) 10.20% RPM: 6.00% Percentage increase in beta: 20% Question 19 options:
a) 14.00%
b) 15.44%
c) 16.21%
d) 17.02%