1 - JustAnswer
1. You charged $ 1,000 on your credit card for Christmas presents. Your credit card company charges you 16 % annual interest, compounded monthly. If you make the minimum payments of $25 per month, how long will it take [to the nearest month] top pay off your balance? (Points : 1) 111 months 58 months 46 months 40 months
2. You decide to borrow $200,000 to build a new house. The bank charges an interest rate of 6% compounded monthly. If you pay the loan back over 30 years, what will your monthly payment be [rounded to the nearest dollar]? (Points : 1) $566 $ 589 $1,199 $ 1,374
3. A 65 year old man is retiring and can take either $ 50,000 in cash or an ordinary annuity that promises to pay him $ 6,000 per year for as long as he lives. Which of the following statements is most correct? (Points : 1) Because of the time value of money, the man will always be better off taking the $ 50,000 up front. The higher the interest rate, the more likely the man will prefer the annuity. If the man expects to live at least 9 years, then we will prefer the annuity. If the interest rate is 15 % per year, the man will be better off taking the $50,000 up front.
4. You are 21 years old today. Your grand parents set up a fund that will pay you $25,000 per year for 20 years, starting on your 65th birthday to supplement your retirement. If the trust can earn 7.5% per year, how much will your grand parents need to put in the trust fund today [rounded to the nearest ten dollars]? (Points : 1) $ 11,370 $ 22.310 $ 5,250 $ 17,450
5. A financial analyst tells you that investing in stocks will allow you to triple your money in 15 years. What annual rate of return is the analyst assuming you can earn? (Points : 1) 7.18% 7.60% 8.14 % 9.45 %
6. Investment A has an expected rate of return of 15 % per year, while investment B has an expected rate of return of 12 % per year. A rational investor will choose _________. (Points : 1) Investment A because of the higher expected return Investment B because a lower return means a lower risk Investment A if A and B are of equal risk Investment A only if the standard deviation of returns for A is higher than the standard deviation of returns for B.
7. Stock A has a beta of 1.2 and a standard deviation of returns of 14%. Stock B has a beta of 1.8 and a standard deviation of returns of 18%. If the risk free rate of return increases and the market risk premium remains constant, then _________. (Points : 1) The required rate of return on Stock B will increase more than the required rate of return on stock A. The required returns on stocks A and B will both increase by the same amount. The required returns on stocks A and B will remain the same The required return on stock A will increase more than the required return on Stock B.
8. What is the expected rate of return on a bond that matures in 8 years, has a par value of $1,000, a coupon rate of 12%, and is currently selling for $ 976? Assume annual coupon payments. (Points : 1) 12.5% 14.5% 12.7% 14.4 %
9. Which of the following bond provisions will make a bond more desirable to investors, other things being equal? (Points : 1) The bond is convertible The bond is callable The coupon rate is lower The bond is subordinated
10. A bond issued by Cornwallis, Inc. 15 years ago has a coupon rate of 7% and a face value of $1,000. The bond will mature in 10 years. What is the value [to the nearest dollar] to an investor with a required return of 10%? (Points : 1) $ 816 $ 886 $ 772 $ 728
................
................
In order to avoid copyright disputes, this page is only a partial summary.
To fulfill the demand for quickly locating and searching documents.
It is intelligent file search solution for home and business.