1. long does it take a present value amount to triple if the expected return is 9%?
8.00 periods
8.04 periods
12.00 periods
12.75 periods
insufficient information to compute
2. What is the PV of a 5-year annuity due (payments at beginning of period, aka annuity in advance) of $550 if the required return is 6.5%
2286
2434
2750
2582
insufficient information to compute
3. You have just taken out a 30-year, $120,000 mortgage on your new home. This mortgage is to be repaid in 360 equal monthly installments. If the stated (nominal) annual interest rate is 14.75 percent, what is the amount of the INTEREST portion of the FIRST monthly installment?
a. $1,475
b. $1,472
c. $1,493
d. $17,700
e. insufficient information to compute
4. What is the EAR for a 9.5% APR with continuous compounding?
a. 7.48%
b. 9.5%
c. 9.97%
d. 10.99%
e. insufficient information to compute
5. Williams Inc. is expected to pay a $3 dividend next year and that dividend is expected to grow at 4% every year thereafter. If the discount rate is 10%, what would be the present value of the expected dividend stream (aka the expected price of the firm's stock)?
a. 50.00
b. 30.00
c. 0.50
d. 75.00
e. 55.00