Blog

A 5-year $100 annuity due will have a lower present value than a 5-year $100 ordinary annuity.

Noncallable bonds that mature in 10 years were recently issued by Sternglass Inc. They have a par value of $1,000 and an annual coupon of 6.5%. If the current market interest rate is 7.0%, at what price should the bonds sell?

Suppose you just won the state lottery, and you have a choice between receiving $500,000 today or a 25-year annuity of $50,000, with the first payment coming one year from today.  What rate of return is built into the annuity?

A stock is expected to pay a dividend of $1.90 at the end of the year. The current stock price is $32.00, and growth (which is constant) = 4.6%. What is the expected dividend yield for this stock?

If an investment pays 12 percent interest compounded annually, its effective annual rate will also be 12 percent.

Deactivation feelings include _____________________

Starting to invest earlier for retirement increases the benefits of compound interest.

A 5-year $100 annuity due will have a higher present value than a 5-year $100 ordinary annuity.

If we are given a periodic interest rate, say a monthly rate, we can find the effective annual rate (EAR) by multiplying the periodic rate by the number of periods per year.

Starting to invest later for retirement increases the benefits of compound interest.