Exam 8: Mathematics of Finance: An Introduction to Basic Concepts and Calculations

If the current yield on 180-day Treasury notes is 6.42% per annum,what price per $100 of face value would an investor pay to purchase them?

What is the current price of a financial security that pays a fixed coupon of 10.2% per annum per $100 face value,compounding half-yearly and maturing in four years,when current yields in the market are 8.6% per annum?

An investor plans to save $1000 per year for the next ten years as a retirement fund,and expects to earn 8.4% per annum,compounded monthly over the period,on all invested funds.How much will the investor have at the end of ten years?

You are considering an investment that will pay a lump sum of $50 000 at the end of six years and you decide that 9% per annum compounded monthly is an appropriate discount factor.What is the value of the investment in today's dollar terms?

If an investor purchases a commercial bill with a face value of $100 000 with a yield of 7.00% per annum and then,in 60 days,sells it at a yield of 6.70% per annum,the investor will make a capital loss on the sale of the bill.

If you borrow $11 000 for four years at an annually compounding rate of 8.2% per annum,what is the total interest on the loan if the interest due is added to the principal over the period and repaid at the maturity date?

If you invest $12 000 for 4.75 years at 7.88% per annum,with interest compounded monthly,what will your total investment be worth at the end of the period?

Calculate the effective annual interest rate corresponding to 9.6% per annum,compounded monthly.

If you make an investment and agree to pay regular monthly payments of $450 at the end of the next twelve months,starting one month from today,what is the present value of this investment if the interest rate is 8.4% per annum compounded monthly?

The market convention to use a 360-day year in the financial markets applies in:

The idea of compound interest refers to:

In relation to interest rates,explain what a yield is.

What is the present value of $1 million payable in 90 days at 8.00% per annum simple interest?

Calculate the effective annual interest rate if you are quoted 8% per annum,compounded every three months.

A finite stream of regular cash flows over a given period is known as a/an:

What is the current price of an existing debenture with a face value of $1000 that pays a fixed coupon of 8.4% per annum,compounded annually,and maturing in five years? Current yields in the market are 6.6% per annum.

The euromarkets,unlike those of the US,follow the market convention that a per-annum rate relates to a 365-day year.

Calculate the effective annual interest rate if you are quoted 8% per annum,compounded half yearly.

If you receive $100 000 back as principal and interest at the end of the year for an initial investment of $93 456 at the start of the year,what interest has been earned on your investment?

If you invest _______ to earn simple interest of 6.8% per year,you will receive $12 375 at the end of two years.