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Normal No Spacing Heading 1 He: FIN 308 Spring 2020 Zayed University Assignment Questions 1....

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Normal No Spacing Heading 1 He: FIN 308 Spring 2020 Zayed University Assignment Questions 1. You plan to retire in 33 years and can invest to earn 18%. You estimate that you will need Rs 1,000,000 at the end of each year for an estimated 18 years after retirement, and you expect to eam 5% during those retirement years. How much do you need to set aside at the end of each year to accumulate the money needed for your retirement (10 marks) 2. You have just made your first $4,000 contribution to your retirement account. You plan to make these contributions at the start of each year for the next 45 years. Assume you eam an 11 percent rate of return a. What will your account be worth when you retire in 45 years b. What if you wait 10 years before contributing c. Does this suggest an investment strategy (10 marks) 3. Explain the following in detail a. What is the relationship between the price of a bond and its YTM b. Explain why some bonds sell at a premium over par value while other bonds sell at a discount. What do you know about the relationship between the coupon rate and the YTM for premium bondse What about for discount bonds For bonds selling at par value (10 marks)

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