ADMS3530-Final-F09 - Name Section ID # Professor...

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Page 1 Name Section ID # Professor Alagurajah’s Section A (Fridays, 2.30-5.30 pm), Professor King’s Section G (Internet), Professor Kohen’s Section F (Tuesdays, 2:30-5:30 pm), Professor Li’s Section E (Wednesdays, 2:30-5:30 pm), Professor Okonkwo’s Section B (Tuesdays, 7- 10 pm), Professor Patterson’s Section D (Thursdays, 4-7 pm), and Professor Tahani’s Section C (Wednesdays, 7-10 pm). AP/ADMS 3530.03 Finance Final Exam Fall 2009 December 16, 2009 Exam – Type A This exam consists of 50 multiple choice questions. 2 points each for a total of 100 points. Choose the response which best answers each question. Circle your answers below, and fill in your answers on the bubble sheet . Only the bubble sheet is used to determine your exam score . BE SURE TO BLACKEN THE BUBBLES CORRESPONDING TO YOUR STUDENT NUMBER. Please note the following eight points : 1) Please use your time efficiently and start with the questions that you are most comfortable with first. Remember : every question carries the same weight, so please do NOT spend too much time on one particular question; 2) Read the exam questions carefully; 3) Choose the answers that are closest to yours, because of possible rounding; 4) Keep at least 2 decimal places in your calculations and final answers, and at least 4 decimal places for interest rates; 5) Interest rates are annual unless otherwise stated; 6) Bonds pay semi-annual coupons unless otherwise stated; 7) Bonds have a par value (or face value) of $1,000; 8) Assume cash flows or payments occur at the end of a period or year, unless otherwise stated; and 9) You may use the back of the exam paper as your scrap paper. 10) Non-programmable financial and/or scientific calculators are allowed.
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Page 2 Numerical Questions 1. You have agreed to pay $1,500 per month on a one-year loan with a principal of $16,300. What is the EAR of this loan? A) 9.09% B) 16.80% C) 18.72% D) 20.42% E) 22.82% 2. You are planning to buy a $320,000 home with a 20% deposit. You finance the remainder with a 25 year mortgage that has a stated rate of 5.40% (APR compounded semi-annually). What is your monthly payment? A) $1,470.49 B) $1,547.70 C) $1,738.78 D) $1,946.24 E) $2,145.87 3. A 10-year bond was issued four years ago with a coupon rate of 5% and a face value of $1,000. The coupons are paid semi-annually. What is the yield to maturity if the bond is selling at $876.00 today? A) 3.81% B) 4.37% C) 4.60% D) 6.72% E) 7.61% 4. How much would an investor lose if she purchased a 20-year zero-coupon bond with a $1,000 par value and 4% yield to maturity, then sold it one year later when market interest rates increased to 6%? A) $125.88 B) $144.58 C) $155.98 D) $167.70 E) $170.51
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Page 3 5. A stock that will pay a $5 dividend next year sells today for $80. If the stock’s required return is 14%, what should investors expect to pay for the stock one year from now? A) $80.00
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This note was uploaded on 12/17/2010 for the course ATKINSON adms 3530 taught by Professor Diana during the Summer '10 term at York University.

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ADMS3530-Final-F09 - Name Section ID # Professor...

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