FIN 448 Advanced Financial Management PRACTICE MIDTERM EXAM – SOLUTION – Disclaimer: This practice midterm exam roughly resembles what the upcoming exam will look like in terms of its format. It has been designed to reflect mainly the materials that are related to our course. However, this does notmean the practice exam will show exactly the same length, difficulty, emphases, and weights on topics we have covered so far for the upcoming exam. Instructions: 1.Please write your student ID(not your name) and circle your section in the space above. 2.The exam is closed-bookand closed-notes. 3.You are allowed (i) one basic calculatorwith logarithm and exponential functions, and (ii) one 8.5” by 11” crib sheetwith notes written or typedon both sides. But you may notuse any other electronic devices (including phone, smart watch, laptop, tablet, etc.) during the exam. 4.You have one hour and twenty minutes (80 minutes) to do the exam. There are 100 total points; points per question are indicated below. Verify that your exam bookconsists of 10 pages(including this cover page). 5.Please round percentagesand valuesup to four (4) decimal places. 6.Your grade will be based only on work in this exam book. Whenever possible, show your work. You will not get full credit for most of your answers unless you do so. Similarly, I can only give you partial creditbased upon what you actually write down during the exam. 7.If you need additional space, please continue on the back of the pageand indicate clearly that you are doing so. It is important to avoid mistakes, especially ones that lead to glaringly wrong answers. Double-check your work carefully. 8.Whenever in doubt, please try to state your reasoning as clearly as possibleand, in particular, explain any additional assumptionsyou may have used for obtaining your answers. 9.Allocate your time carefully and all the best of luck!