# FIN 534 Homework Set 2

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Directions: Answer the following questions on a separate document. Explain how you reached the answer or show your work if a mathematical calculation is needed, or both. Submit your assignment using the assignment link in the course shell.

Assume that you are nearing graduation and have applied for a job with a local bank. The bank’s evaluation process requires you to take an examination that covers several financial analysis techniques.

Use the following information for Questions 1 through 2:

1. What is the present value of the following uneven cash flow stream −\$50, \$100, \$75, and \$50 at the end of Years 0 through 3? The appropriate interest rate is 10%, compounded annually.

1. Suppose that on January 1 you deposit \$100 in an account that pays a nominal (or quoted) interest rate of 11.33463%, with interest added (compounded) daily. How much will you have in your account on October 1, or 9 months later?

Use the following information for Questions 3 and 4:

A firm issues a 10-year, \$1,000 par value bond with a 10% annual coupon and a required rate of return is 10%.

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