1700_actb212f_specimenexampaper.pdf - SPECIMEN EXAMINATION...

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The Open University of Hong Kong SPECIMEN EXAMINATION PAPER Important: This specimen examination paper serves solely as an illustration of the types of questions which may be contained in the examination. Students should not construe these questions as the actual examination questions nor part of the actual examination paper. In addition, this specimen examination paper does not purport to represent the complete scope or coverage of the course and the distribution of the topics to be examined.
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ACT B212F (Specimen Exam Paper) Page 2 of 9 This examination paper is divided into THREE (3) Sections . Students are required to answer ALL Sections and answer the number of questions indicated in each Section. SECTION A: This section contains 10 multiple-choice questions which MUST be answered. Total marks for this section are 20 marks. SECTION B: Answer ONE (1) COMPULSORY question. Question 1 carries 40 marks. SECTION C: Answer any TWO (2) of the three questions. Each question carries 20 marks and total marks for Section C are 40 marks. You are advised to show clearly your workings and include any assumptions that you feel necessary in your answers. SECTION A (20 marks) Answer ALL multiple-choice questions in this Section. Each question is worth 2 marks. Mark all the answers on the answer book. 1. Suppose the face value of 2-year, 10% debentures is $100,000. The debentures pay interest four times a year. The market interest rate is 12% per annum. What is the present value of the debentures? (Hints: Present value annuity factor, PVIFA(3%,8)= 7.0197) A. $35,099 B. $78,940 C. $96,490 D. Insufficient information 2. Owners of preference shares do NOT have: 3. The debt ratio:
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