question archive An investment company has Php10M to invest and has two options
An investment company has Php10M to invest and has two options
Subject:FinancePrice:2.86 Bought11
An investment company has Php10M to invest and has two options. Calculate the value of the investment under the two options. Which one would you recommend?
----------
Solutions = 9 points
correct choice = 2 points
Select one:
a. To invest in the money markets for 180 days at 5.5% which can be reinvested at maturity for another 180 days at 6.3%
b. To invest it in a term deposit for one year at 6%.
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
Value of investment with option a = 10 mn * (1+0.055/2) * (1+0.063/2)
= 10.5986625 mn
Value of investment with option b = 10 mn * (1+0.06)
= 10.60
Optiohn b is recommanded
