I need help with the (((((((red)))))) check marks.. 10. PerpetuitiesPerpetuities are also called annuities with an extended or unlimited life. Based on your understanding ofperpetuities, answer the following questions.Which of the following are characteristics of a perpetuity? Check all that apply.O In a perpetuity, returns-in the form of a series of identical cash flows-are earned.O A perpetuity continues for a fixed time period,O The present value of a perpetuity is calculated by dividing the amount of the payment by theinvestor's opportunity interest rate.O A perpetuity is a series of regularly timed, equal cash flows that is assumed to continue indefinitelyinto the future.Your grandfather wants to establish a scholarship in his father's name at a local university and has stipulated thatyou will administer it. As you've committed to fund a $10,000 scholarship every year beginning one year fromtomorrow, youʻll want to set aside the money for the scholarship immediately. At tomorrow's meeting with yourgrandfather and the bank's representative, you will need to deposit(rounded to the nearest wholedollar) so that you can fund the scholarship forever, assuming that the account will earn 6.00% per annum everyyear.133,334Oops! The bank representative just reported that he misquoted the available interest rate on the scholarship'saccount. Your account should earn 4.75%. The amount of your required deposit should be revised toThis suggests there isrelationship between the interest rate earned on theaccount and the present value of the perpetuity.O 157,895® 315, 789© 210,526INverseA DIrectD178,947

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Which of the following are characteristics of a perpetuity? Check all that apply. O In a perpetuity, returns-in the form of a series of identical cash flows-are earned. O A perpetuity continues for a fixed time period. O The present value of a perpetuity is calculated by dividing the amount of the payment by the investor's opportunity interest rate. O A perpetuity is a series of regularly timed, equal cash flows that is assumed to continue indefinitely into the future.

Which of the following are characteristics of a perpetuity? Check all that apply. O In a perpetuity, returns-in the form of a series of identical cash flows-are earned. O A perpetuity continues for a fixed time period. O The present value of a perpetuity is calculated by dividing the amount of the payment by the investor's opportunity interest rate. O A perpetuity is a series of regularly timed, equal cash flows that is assumed to continue indefinitely into the future.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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6. Perpetuities Perpetuities are also called annuities with an extended or unlimited life. Based on your understanding of perpetuities, answer the following questions. Which of the following are characteristics of a perpetuity? Check all that apply. A perpetuity is a stream of unequal cash flows. The current value of a perpetuity is based more on the discounted value of its nearer (in time) cash flows and less by the discounted value of its more distant (in the future) cash flows. A perpetuity is a stream of regularly timed, equal cash flows that continues forever. The value of a perpetuity cannot be determined. A local bank’s advertising reads: “Give us $45,000 today, and we’ll pay you $800 every year forever.” If you plan to live forever, what annual interest rate will you earn on your deposit? 1.42% 2.85% 2.49% 1.78% Oops! When you went in to make your deposit, the bank representative said the amount of…
9. Perpetuities Perpetuities are also called annuities with an extended, or unlimited, life. 1. Based on your understanding of perpetuities, answer the following questions: Which of the following are characteristics of a perpetuity? Check all that apply. A perpetuity continues for a fixed time period. In a perpetuity, returns—in the form of a series of identical cash flows—are earned. The principal amount of a perpetuity is repaid as a lump-sum amount. A perpetuity is a series of regularly timed, equal cash flows that is assumed to continue indefinitely into the future. 2. A local bank’s advertising reads: “Give us $35,000 today, and we’ll pay you $2,400 every year forever.” If you plan to live forever, what annual interest rate will you earn on your deposit? 5.49% 6.86% 9.60% 8.23% 3. Oops! When you went in to make your deposit, the bank representative said the amount of required deposit reported in the advertisement was incorrect and…
Perpetuities are also called annuities with an extended or unlimited life. Based on your understanding of perpetuities, answer the following questions. Which of the following are characteristics of a perpetuity? Check all that apply. A perpetuity is a series of regularly timed, equal cash flows that is assumed to continue indefinitely into the future. A perpetuity continues for a fixed time period. In a perpetuity, returns-in the form of a series of identical cash flows-are earned. The principal amount of a perpetuity is repaid as a lump-sum amount. Your grandfather wants to establish a scholarship in his father's name at a local university and has stipulated that you will administer it. As you've committed to fund a $20,000 scholarship every year beginning one year from tomorrow, you'll want to set aside the money for the scholarship immediately. At tomorrow's meeting with your grandfather and the bank's representative, you will need to deposit (rounded to the nearest whole dollar) so…
10. Perpetuities Perpetuities are also called annuities with an extended or unlimited life. Based on your understanding of perpetuities, answer the following questions. Which of the following are characteristics of a perpetuity? Check all that apply. The present value of a perpetuity is calculated by dividing the amount of the payment by the investor's opportunity interest rate. A perpetuity is a series of regularly timed, equal cash flows that is assumed to continue indefinitely into the future. ☐ A perpetuity continues for a fixed time period. In a perpetuity, returns-in the form of a series of identical cash flows-are earned. Your grandfather wants to establish a scholarship in his father's name at a local university and has stipulated that you will administer it. As you've committed to fund a $15,000 scholarship every year beginning one year from tomorrow, you'll want to set aside the money for the scholarship immediately. At tomorrow's meeting with your grandfather and the bank's…
Perpetuities are also called annuities with an extended or unlimited life. Based on your understanding of perpetuities, answer the following questions. Which of the following are characteristics of a perpetuity? Check all that apply. In a perpetuity, returns—in the form of a series of identical cash flows—are earned. A perpetuity continues for a fixed time period. A perpetuity is a series of regularly timed, equal cash flows that is assumed to continue indefinitely into the future. The principal amount of a perpetuity is repaid as a lump-sum amount. Your grandfather wants to establish a scholarship in his father’s name at a local university and has stipulated that you will administer it. As you’ve committed to fund a $15,000 scholarship every year beginning one year from tomorrow, you’ll want to set aside the money for the scholarship immediately. At tomorrow’s meeting with your grandfather and the bank’s representative, you will need to deposit…
Perpetuities are also called annuities with an extended or unlimited life. Based on your understanding of perpetuities, answer the following questions. Which of the following are characteristics of a perpetuity? Check all that apply. In a perpetuity, returns—in the form of a series of identical cash flows—are earned. A perpetuity continues for a fixed time period. A perpetuity is a series of regularly timed, equal cash flows that is assumed to continue indefinitely into the future. The principal amount of a perpetuity is repaid as a lump-sum amount.
10. Perpetuities Perpetuities are also called annuities with an extended or unlimited life. Based on your understanding of perpetuities, answer the following questions. A. Which of the following are characteristics of a perpetuity? Check all that apply. The value of a perpetuity cannot be determined. A perpetuity is a stream of regularly timed, equal cash flows that continues forever. A perpetuity is a stream of unequal cash flows. The current value of a perpetuity is based more on the discounted value of its nearer (in time) cash flows and less by the discounted value of its more distant (in the future) cash flows. B. Your grandfather wants to establish a scholarship in his father’s name at a local university and has stipulated that you will administer it. As you’ve committed to fund a $25,000 scholarship every year beginning one year from tomorrow, you’ll want to set aside the money for the scholarship immediately. At tomorrow’s meeting…
Select all the statements on perpetuities that are correct. a. The present value of a perpetuity increases if the interest rate increases. b. If I multiply the present value of a perpetuity with the interest rate then I get the value of a single payment of the cashflow stream. c. The present value value of a perpetuity is independent of the interest rate. d. The present value of a perpetuity is infinite as all the payments add up to infinity. e. A perpetuity describes a constant cashflow at the end of each year that continues infinitely long.
Perpetuities are also called annuities with an extended or unlimited life. Based on your understanding of perpetuities, answer the following questions. Which of the following are characteristics of a perpetuity? Check all that apply. A perpetuity is a stream of regularly timed, equal cash flows that continues forever. The value of a perpetuity is equal to the sum of the present value of its expected future cash flows. The current value of a perpetuity is based more on the discounted value of its nearer (in time) cash flows and less by the discounted value of its more distant (in the future) cash flows. The value of a perpetuity cannot be determined. Your grandfather wants to establish a scholarship in his father’s name at a local university and has stipulated that you will administer it. As you’ve committed to fund a $25,000 scholarship every year beginning one year from tomorrow, you’ll want to set aside the money for the scholarship immediately.…
Perpetuities are also called annuities with an extended or unlimited life. Based on your understanding of perpetuities, answer the following questions. Which of the following are characteristics of a perpetuity? Check all that apply. The value of a perpetuity cannot be determined. A perpetuity is a stream of regularly timed, equal cash flows that continues forever. The current value of a perpetuity is based more on the discounted value of its nearer (in time) cash flows and less by the discounted value of its more distant (in the future) cash flows. A perpetuity is a stream of unequal cash flows. A local bank's advertising reads: "Give us $45,000 today, and we'll pay you $800 every year forever." If you plan to live forever, what annual interest rate will you earn on your deposit? 2.49% 1.78% O 1.42% O2.14% Oops! When you went in to make your deposit, the bank representative said the amount of required deposit reported in the advertisement was the interest rate earned on your deposited…
Which of the following are characteristics of a perpetuity? Check all that apply. The present value of a perpetuity is calculated by dividing the amount of the payment by the investor’s opportunity interest rate. The principal amount of a perpetuity is repaid as a lump-sum amount. A perpetuity continues for a fixed time period. A perpetuity is a series of regularly timed, equal cash flows that is assumed to continue indefinitely into the future. Your grandfather wants to establish a scholarship in his father’s name at a local university and has stipulated that you will administer it. As you’ve committed to fund a $15,000 scholarship every year beginning one year from tomorrow, you’ll want to set aside the money for the scholarship immediately. At tomorrow’s meeting with your grandfather and the bank’s representative, you will need to deposit ___________ (rounded to the nearest whole dollar) so that you can fund the scholarship forever, assuming that the account will earn…
7. Future value of annuities There are two categories of cash flows: single cash flows, referred to as “lump sums,” and annuities. Based on your understanding of annuities, answer the following questions. Which of the following statements about annuities are true? Check all that apply. An annuity due is an annuity that makes a payment at the beginning of each period for a certain time period. Ordinary annuities make fixed payments at the beginning of each period for a certain time period. An annuity is a series of equal payments made at fixed intervals for a specified number of periods. An annuity due earns more interest than an ordinary annuity of equal time. Which of the following is an example of an annuity? A lump-sum payment made to a life insurance company that promises to make a series of equal payments later for some period of time An investment in a certificate of deposit (CD) Katie had a high monthly food bill…

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