End of Year Cash Flow Series A Cash Flow Series B Cash Flow Series C $3.0X $1,000 2Y 1 2.5X 1,500 2Y 2.0X 2,000 2Y 3 1.5X 2,500 Y 4 1.0X 3,000 Y 5 -1,000 -2,500 Y 2.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Consider the following three cash flow series: Determine the values of X and Y so that you are indifferent among all three cash flows if your TVOM is 11%
per year compounded yearly.

End of Year Cash Flow Series A Cash Flow Series B Cash Flow Series C
$3.0X
$1,000
2Y
1
2.5X
1,500
2Y
2.0X
2,000
2Y
3
1.5X
2,500
Y
4
1.0X
3,000
Y
5
-1,000
-2,500
Y
2.
Transcribed Image Text:End of Year Cash Flow Series A Cash Flow Series B Cash Flow Series C $3.0X $1,000 2Y 1 2.5X 1,500 2Y 2.0X 2,000 2Y 3 1.5X 2,500 Y 4 1.0X 3,000 Y 5 -1,000 -2,500 Y 2.
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