# ADMS3530_Final exam_Type A_Winter 2007 - Name Section...

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2. What is the present value of a four-year annuity of \$100 per year that begins two years from today if the discount rate is 9 percent? A) \$297.22 B) \$323.86 C) \$356.85 D) \$388.97 2
3. \$3,000 is deposited into an account paying 10 percent annually, to provide three annual withdrawals of \$1,206.34 beginning in one year. How much remains in the account after the second withdrawal? A) \$587.32 B) \$1,096.67 C) \$1,206.34 D) \$1,326.97 4. Approximately how much should be accumulated by the beginning of retirement to provide a \$2,500 monthly check (to be paid at the end of each month) that will last for 25 years, during which time the fund will earn 8 percent interest with monthly compounding? A) \$261,500 B) \$323,800 3

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\$578,700 D) \$690,000 5. An investor buys a ten-year, 7 percent coupon bond for \$1,050, holds it for one year and then sells it for \$1,040. What was the investor's rate of return over the 1-year holding period? Assume coupons are paid annually. A) 5.71 percent B) 6.00 percent C) 6.67 percent D) 7.00 percent 6. A bond with 10 years until maturity, an 8 percent coupon rate, and an 8 percent original yield to maturity increased in price to \$1,107.83 yesterday. What appears to have happened to interest rates? Coupons are paid annually. A)
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ADMS3530_Final exam_Type A_Winter 2007 - Name Section...

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