1. Which of the following features, everything else the same, give bonds higher yields?
A. The bond is a senior bond
B. the bond is a junior bond
C. The bond is callable
D. The bond is convertible
E. The bond is putable
2. Your investment account pays 5.6%, compounded annually. If you invest $5,000 today, how many years will it take for your investment to grow to $9,140.20?
3. What's the present value of a 4-year ordinary annuity of $2,250 per year plus an additional $3,750 at the end of Year 4 if the interest rate is 5%?
4. Stock A's stock has a beta of 1.30, and its required return is 14.50%. Stock B's beta is 0.80. If the risk-free rate is 4.75%, what is the required rate of return on B's stock? (Hint: First find the market risk premium.)