# Standard Deviation

### Standard Deviation

### You will receive $5,000 per year, every year for the next five

10. You will receive $5,000 per year, every year for the next five (5) years, beginning at the end of this year.

If you use 6% as your discount rate, calculate the present value of this annuity.

11 Refer to the previous question: this is a(n)

a. back load annuity

b. front load annuity

c. annuity due

d ordinary annuity

e none of the above

12 A client invests $5,000 every year, at the end of each year, beginning one year from today, for the next

five years. The account is expected to earn 6.25% What will the balance be in five years.

13 An investor deposits $5,750 in a certificate of deposit which pays 7.35% and

compounds weekly. What will be the balance in seven (7) years

14 Cash flows from a new factory are expected to be $3,000,000 per year, every year for the next ten (10)

years. If investor’s use 6.25% as the discount rate, calculate the present value of this investment.

A

15 Parker Corporation is planning to break ground on a new factory. The factory will require an initial cash

outlay of $5,000,000 which will be due in September 2020 (five years). How much will Parker need to deposit,

or set a-side every quarter, for the next 5 years (60 months), in an account that earns 9.35%, in order to have the funds available for this outlay (investment).

16 The value of any asset is

a. whatever a professional appraiser determines is appropriate

b. what the highest bidder is willing to pay for it

c. the current market price

d the discounted value of all expected cash flows

e none of the above

17 Stan Kunbar is interested in investing in a project that is expected to pay $5,000 every ear, for the next fifteen (15)

years. Using a discound rate of 9.25%, what is the present value of this project.

18 $50,000 depoisted in an account earning 3.25% compounded daily. Calculate the future value

19 Following are the historical returns for Cool Hill Ski Resort (where the snow is smooth as silk!)

Year A

2011 – 12.0%

2012 – 8.0%

2013 -12.0%

2014 -16.0%

2015 – 7.5%

What is the expected return for 2016 (average) and standard deviation (population) for this Cool Hill

A Average=

B Standard Deviation (population)=