Quiz Submissions - Homework #3E (Perpetuity, EAR, RRR) Question 1                          What is the present value of a $752 perpetuity discounted back to the present at 4

Quiz Submissions - Homework #3E (Perpetuity, EAR, RRR)

Question 1                          What is the present value of a $752 perpetuity discounted back to the present at 4.74 percent.

The answer should be calculated to two decimal places.

Question 2                          You plan to apply for a loan from Bank of America. The nominal annual interest rate for this loan is 13.57 percent, compounded daily (with a 365-day year). What is the effective annual rate, or EAR (annual percentage yield), of this loan?

Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)

Question 3                          You are considering an investment that has a nominal annual interest rate of 9.19 percent, compounded semiannually. Therefore, the effective annual rate, or EAR (annual percentage yield) is _____.

Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)

Question 4                          Assume that the inflation rate during the last year was 1.78 percent. US government T-bills had the nominal rates of return of 4.06 percent. What is the real rate of return for a T-bill?

Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)

Question 5                          Large-cap stocks had the nominal rates of return of 6.80 percent. The rate of inflation during the last year was 1.45 percent. What is the real rate of return for large-cap stocks?

Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)