Chapter 2 Homework - Tài liệu tham khảo | Đại học Hoa Sen

Chapter 2 Homework
1/ What is the difference between simple interest and compound interest?
2/ Suppose you had a relative deposit $10 at 8% interest 150
years ago. How much would the investment be worth today
using: 2a/ compounding interest? 2b/ simple interest?
3/ If I deposit $2,000 in an account that earns 6% compound
interest p.a., how much will I have after 3 years?
4/ If I deposit $2,000 in an account that earns 6% p.a. with
interest paid every 3 months, how much will I have after 3 years?
5/ You want to begin saving for your daughter’s college
education and you estimate that she will need $100,000 in 10
years. If you feel confident that you can earn 8% per year, how
much do you need to invest today? Chapter 2 Cont.
Homework: Multiple CF, Perpetuity and Annuity
At Vietnamese stock market: FPT FPT’s information:
Dividend payment next year: 2000 VND/stock Discount rate: 10% Dividend growing: 4%
1/ Calculate value of the stock FPT indefinitely
2/ Should we buy if the current price of FPT is
136.000 VND/stock? And why? Based on the result of question 1.
3/ Based on question 2. If you should not buy, what
prices you suggest to buy ? why 4/ If D2 = 2100, D3 = 2200
Calculate value of the stock FPT for 3 years using discount rate of 10%.
Chapter 2, 3: interest rate and years
1/ Suppose you are offered an investment that will allow you to
double your money in 6 years. You have $15,000 to invest.
a/ What is the implied rate of interest? Compare to the market interest rate of 12 – 15%. b/ What is your solution:
b1: if you increase years, what year is reasonable?
b2: if you increase savings, how much is reasonable?
2/ You want to purchase a new flat and you are willing to pay 3
billion VND. If you can invest at 9% per year and you currently
have 500 million VND, how long will it be before you have
enough money to pay cash for the flat?
3/ If nominal interest rate is 12% and inflation rate is 2.5%, how much real interest rate using a/ simple formula b/ Fisher formula
c/ What should you choose real IR based on (a) and (b) and why? Chapter 4: Bond
1/ US treasury bond has a face value $1,000; 9% coupon rate
and 30 years to maturity. Please compute the bond price with YTM = 10%/ year and
What is Bond Price? According to: 1/ Annually coupon payment 2/ Semi-annually 3/ Quarterly 4/ Monthly 5/ Weekly