ADMS3530-Midterm-F10

ADMS3530-Midterm-F10 - Name Section A (Fri 11:30am) - Lois...

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1 Name Section ID # Section A (Fri 11:30am) - Lois King Section B (Tue 7pm) - Lois King Section C (Wed 7pm) - Lois King Section D (Thu 4pm) - Chris Robinson Section E (Wed 2:30pm) - Bert Kohen Section F (Mon 7pm) - Sam Alagurajah Section G (internet) - Lois King Section H (Mon 4pm) - Sam Alagurajah ADMS 3530.03 Finance Midterm Exam Fall 2010 Sunday Oct. 31, 2010 Type “A” This exam consists of 30 multiple choice questions and carries a total of 100 marks . Choose the response which best answers each question. Circle your answer below , and fill in your answers on the bubble sheet . Only the bubble sheet is used to determine your score on the exam . Please do not forget to write your name and ID number at the top of this page and on the bubble sheet. Also please write Type A or B on the bubble sheet. Please note the following points : 1) Read the questions carefully and use your time efficiently . 2) Choose the answers that are closest to yours, because of possible rounding. 3) Keep at least 4 decimal places in your calculations (6 decimals for interest rates). 4) The 20 “Calculation questions” are worth 4 marks each. 5) The 10 “Conceptual questions” are worth 2 marks each. 6) Unless otherwise stated, interest rates are annual , and bonds pay semi-annual coupons and have a face value (or par value) of $1,000 . 7) You may use the back of the exam paper as your scrap paper.
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2 20 Calculation questions (4 marks each) 1. You are planning to establish a 20-year scholarship fund at York University that will pay $25,000 at the end of the first year and then increase by 1.5% per year. The manager expects that the fund will earn a 5.75% annual rate of return. How much should you donate to York today in order to maintain this scholarship? A) $50,346 B) $146,508 C) $278,225 D) $329,235 E) $588,235 2. Compute the present value of the following set of payments for two years: $300 each quarter for the first year and $600 each quarter for the second year. The effective annual rate is 6% and payments will begin at the end of the first quarter. A) $3,000.56 B) $3,340.77 C) $3,514.06 D) $3,854.02 E) $3,999.14 3. How much will be in an account after 15 years if the initial deposit was $2500 and it earned interest at an APR of 6%, compounded monthly? A) $1,018.71 B) $1,242.42 C) $2,735.88 D) $5,030.49 E) $6,135.23 4. What is the effective annual rate on a deposit of $3,000 made eight years ago if the deposit is worth $4,453.52 today? The deposit pays interest semi-annually. A) 2.50% B) 5.00% C) 5.06% D) 10.12% E) 12.50%
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3 5. You are planning to buy a new condominium in Toronto. The Condo is worth $400,000; you will put a 10% down payment and obtain a 25-year fixed rate mortgage at 6.25% (APR semi-annually compounded) for the rest. You have decided to make weekly payments which will begin at the end of the first week. What is your weekly payment? (Assume there are 52 weeks in one year.)
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This note was uploaded on 03/10/2011 for the course ADMS 3530 taught by Professor Unknown during the Winter '09 term at York University.

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ADMS3530-Midterm-F10 - Name Section A (Fri 11:30am) - Lois...

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