Question1: You have $10,000 to invest. You do not want to take any risk, so you will put the funds in a savings account at the local bank. Of the following choices, which one will produce the largest sum at the end of 22 years?
[A] An account that compounds interest quarterly.
[B] An account that compounds interest monthly.
[C] An account that compounds interest annually.
[D] An account that compounds interest daily.
Question2: If there is a 20 percent chance we will get a 16 percent return, a 30 percent chance of getting a 14 percent return, a 40 percent chance of getting a 12 percent return, and a 10 percent chance of getting an 8 percent return, what is the expected rate of return?
[A] 14%
[B] 15%
[C] 12%
[D] 13%
Question3: Which of the following statements is true about time value of money?
[A] The future value of a single sum will be greater if funds earn 12% instead of 6%.
[B] The future value of a single sum will be unaffected by the length of time funds are invested.
[C] The future value of a single sum will be greater if funds earn 5% instead of 10%.
[D] The future value of a single sum will be unaffected by the rate of return at which funds grow.
Question4: If you hold a portfolio made up of the following stocks: Investment Value Beta Stock A $2,000 1.5 Stock B $5,000 1.2 Stock C $3,000 0.8 calculate the beta of the portfolio?
[A] 1.32
[B] 1.17
[C] 1.14
[D] Can't be determined from information given.