1. What is the effective rate of interest on a cd that has a nominal rate of 8.5 percent with interest compounded.
2. Twenty years ago 9.0 coupon rate bond was issued with a maturity of 25 years at par value of 1000 , today’s interest rate is 9% what is it selling for today?
3. You are considering the following two mutually exclusive projects that will not be repeated. The required rate of return is 11.25% for project A and 10.75% for project B. Which project should you accept and why?