An annuity immediate has $40$ initial quarterly payments of $20$ followed by perpetuity of quarterly payments of $25$ starting in the eleventh year. Find the present value at $4\% $ convertible ...
Background. We can play a game in which we can put one dollar and get out $X$ dollars, where $X$ is 2 dollars with probability $p>1/2$, or zero dollars with probability $1-p$. We also assume that ...
We have a coin that has a probability $p>1/2$ of coming up heads (and probability $1-p$ of coming up tails). We now play the following game: We start with a fortune of one dollar. We toss the ...