1. Calculate the Net present value of the following cash flows at 7% p.a.:-
|
Time (years)
|
Cash Flow
|
|
0
|
-250,000
|
|
1
|
100,000
|
|
2
|
120,000
|
|
3
|
130,000
|
2. What is the price of a three year bond with a coupon of 5% when yields (interest rates) are 3%?
3. You hold a four year bond with a price of 97.6% and a coupon of 4%. What is the Yield to Maturity of the bond?
4. What is the EAR if you have a credit card that charges 11% per annum with monthly compounding?
5. You have a four year bond with a coupon of 8% and interest rates are 9%. Show how the gross redemption proceeds can be made immune from a 1% shift in interest rates with calculations to demonstrate what you have stated.
6. How useful are financial statements in planning your company's future financial needs? When are they a good starting point and when are they less useful?
Attachment:- Assignment.rar