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olga_2 [115]
3 years ago
11

Martin wants to provide money in his will for an annual bequest to whichever of his living relatives is oldest. That bequest wil

l provide $ 9 comma 000 in the first​ year, and will grow by 5​% per​ year, forever. If the interest rate is 10​%, how much must Martin provide to fund this​ bequest?
Business
1 answer:
QveST [7]3 years ago
7 0

Answer:

Present Value= $180,000

Explanation:

Giving the following information:

The bequest will provide $9,000 in the first​ year and will grow by 5​% per​ year, forever.

Interest rate= 10%

To calculate the present value of this perpetual annuity with a growing rate, we need to use the following formula:

PV= Cf/ (i-g)

Cf= cash flow= 9,000

i= 0.10

g= 0.5

PV= 9,000/ (0.10 - 0.05)= $180,000

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A fund manager is considering three mutual funds. The 1st is a stock fund, the 2nd is a long-term government and corporate bond
Vinil7 [7]

Answer:

Expected return is: 7.37% and the Standard deviation is: 24.96%

Explanation:

Correlation between fund S&B=0,0667

Standard Deviation of Fund S=41%

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E(R) of Stock Fund S=12%

E(R) of Stock Fund B=5%

Covariance between the funds = Standard Deviation of Fund(B) × Standard Deviation of Fund S × correlation between these funds

Cov = 0.41 × 0.30 × 0.0667 = 0.008204

Now minimum variance portfolio is found by applying:

W min(S)=(SDB)^2-Cov(B,S) / ((SDS)^2+(SDB)^2-2Cov(B,S)

W min(S) = 0.338431

W min(B) = 1-0.338431=0.661569

1) E(r)min= 0.338431 × 12% + 0.661569 × 5% = 7.37%

2) Standard Deviation:

SD Min = (Ws^2XSDs^2+Wb^2XSDb^2+2XWsWb*Cov(s,B)^1/2

SDmin=(0.338431^2 × 0.41^2 + 0.661569^2 ×   0.3^2   + 2 × 0.338431 × 0.661569 × 0.008204)^1/2

SDmin=24.96%

8 0
3 years ago
What is aacceleration?<br>Who is the most active MOD here? ​
swat32

Answer:

Acceleration is the rate of change of velocity. Usually, acceleration means the speed is changing, but not always. When an object moves in a circular path at a constant speed, it is still accelerating, because the direction of its velocity is changing.

Explanation:

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3 years ago
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Arlecino [84]

Answer:

Gross Domestic Products (GDP) is a measure of the total market value of all finished goods and services made within a country during a specific period.

Explanation:

GDP is an acronym for Gross Domestic Products (GDP) and it can be defined as a measure of the total market value of all finished goods and services made within a country during a specific period.

Simply stated, GDP is a measure of the total income of all individuals in an economy and the total expenses incurred on the economy's output of goods and services in a particular country.

On a related note, Gross Domestic Products (GDP) is a measure of the production levels of any nation.

Basically, the four (4) major expenditure categories of GDP are;

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II. Investment (I).

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6 0
2 years ago
Avicorp has a $10 million debt issue outstanding, with a 6% coupon rate. The debt has semiannual coupons, the next coupon is due
rjkz [21]

Answer:

Explanation:

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An example of a logistical function
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