When Calculating the Present Value of a Stream of Payments

question 1

Multiple Choice

When calculating the present value of a stream of payments at a market yield of 5% compounded semi- annually, the numerator in the fourth period of the calculation is:

• A) (1.05) to the power of 4.
• B) (1.025) to the power of 4.
• C) (1.10) to the power of 4.
• D) (1.0125) to the power of 4.

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Definitions:

Presenting Concern

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Referring Agent

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