Rounding 2 decimal places for your answer in percent, the Holding Period Rectum
ID: 2721362 • Letter: R
Question
Rounding 2 decimal places for your answer in percent, the Holding Period Rectum with divided (HP Rwd) for Harley-Davidson the two-day (April 29-May 02) period is closest to: (0.8%) 3.9 % 2.8% 3.6 % Other The net in closing price of January 31^st is: -$0.42 $0.52 $0.42 $-0.50 Other The dividend yield on the stock for May 02 is closest to: 1.50% 2.90% 2.75% 1.40% Other This is a time value of money (TVM) question; A student has $ 3,000 saved up to take a vacation in 4 years time. She doesn't want to take a big risk so a commercial bank gives the the following option to choose from {Non - compounding = PV[(1 + i(N)]; Compounding = PV [(1 + i/m)^N(m)]} Non - compounding rage to 9.5 % Compounding rate of 8.2% annual compounding Compounding rate of 8% compounded quarterly. Given that you need the highest future value you would choose: Option a Option b Option c Insufficient information given The following information refers to question 18 and 19Explanation / Answer
17)
Since the no compounding rate of 9.5% produces the highest value($4140) of the 3000 after 4 years therefore you should choose option a.
The value of savings 3000 after 4 yrs 1)no compounding rate of 9.5% $ 4,140.00 (=3000*(1+4*9.5%)) 2) compounding rate of 8.2% annual compounding $ 4,111.78 (=3000*(1+8.2%)^4) 3) compounding rate of 8% compounded quarterly $ 4,118.36 (=3000*(1+8%/4)^(4*4))Related Questions
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