CFA Practice Question

There are 410 practice questions for this study session.

CFA Practice Question

You expect to receive a series of annual payments forever. The present value of this series of payments is $575.00. If these payments can be invested at a rate of 13% per year, what is the amount of each cash flow?
A. $4,423.08
B. $575.00
C. $74.75
Explanation: A = (PV)(r) = (575.00)(.13) = 74.75

User Contributed Comments 2

User Comment
sarasyed5 im sorry i know i sound stupid but which formula is this?
fberlinger PV of a perpetuity = PMT / (I/Y)
>> solve for PMT
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