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FIN4160-exam1 - FIN4160 4160 Exam 1 Student Name MC section...

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FIN4160 4160 Exam 1 Student Name________________ MC section: Please write your answer at the space provided at the end of the exam. 1. Using a discount rate of 8% per year, what is the present value of an ordinary annuity of $100 per year for 10 years? a. $1,000 b. $671 c. $887 d. $557 2. Riskier securities have _____ returns. 3. You bought 100 shares of stock at $35, received $3 per share in dividends, and sold the shares for $50. Your holding period return is 4. You buy a stock for $50 per share. Over the next four months, it has monthly returns of 4%, 5%, 2%, and -3%. The value of a share at the end of the fourth month is 5. If someone wants no chance of a loss of principal value, the appropriate primary objective is a. stability of principal b. income c. growth of income d. capital appreciation 6. Which of the following primary/secondary objective combinations is infeasible?
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7. To reduce the duration of a bond portfolio, managers often use
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