ADMS3530_final exam_Type A Part I_Winter 2008

ADMS3530_final exam_Type A Part I_Winter 2008 - Name...

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Name Section ID # (Professor Alagurajah’s Sections O (Wednesdays, 7-10 pm) and S (Thursdays, 7-10 pm), Professor Ho’s Section T (Tuesdays, 2:30-5:30 pm), Professor King’s Section P (Internet), Professor Li’s Sections M (Thursdays, 2:30-5:30 pm) and N (Tuesdays, 7-10 pm), Professor Tissenbaum’s Section Q (Mondays, 7-10 pm), and Professor Yildirim’s Section R (Mondays, 4-7 pm).) AK/ADMS 3530.03 Finance Final Exam Winter 2008 April 10, 2008 Type A Exam - Part I IMPORTANT: The exam consists of TWO parts (I and II). This is only the Part I. Part II will be distributed later during the exam. Please use the same bubble sheet for both parts. This part consists of 25 multiple choice questions , 2 points each for a total of 50 points . 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 exam score . Please do not forget to write your name and ID # at the top of this cover page and on the bubble sheet. Also please write the type of your exam (A or B) on the bubble sheet. Be sure to blacken the bubbles corresponding to your student number. 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 2 decimal places in your calculations and final answers, and at least 4 decimal places for interest rates. 4) Unless otherwise stated, interest rates are annual , and bonds have a face value (or par value) of $1,000 and pay coupons semiannually . 5) You may use the back of the exam paper as your scrap paper. 16 numerical questions (2 points each) 1. You’re a recent Atkinson graduate and make the following acquisitions this year. New car of $28,320. New wardrobe of $3,248. You also have a new job that pays you $42,000 after taxes this year and $46,000 after taxes next year. Your annual living expenses are $34,000. You plan to get a loan to make up for the difference between your current income and current consumption. The bank offers you a loan at a rate of 14% annually and you intend to pay off this loan in one year from today. How much will you have left to spend next year? A) $19,132.48 1
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B) $23,568.00 C) $26,867.52 D) $65,568.00 2. Joshua Corporation recently issued 10-year bonds at a price of $1,000, which is equal to the par value of each bond. These bonds pay $60 in interest every six months. The bond price has remained the same since they were issued. Due to additional financing needs, the firm wishes to issue new bonds that would have a maturity of 10 years, a par value of $1,000, and pay $40 in interest every six months. If both bonds have the same yield, how many new
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This note was uploaded on 04/11/2011 for the course ADMS 3530 taught by Professor Unknown during the Spring '09 term at York University.

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ADMS3530_final exam_Type A Part I_Winter 2008 - Name...

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