Chapter 6 quiz

Chapter 6 quiz - Chapter 6 Student: _ 1. Which one of the...

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Chapter 6 Student: ___________________________________________________________________________ 1. Which one of the following differentiates an annuity from a perpetuity? A. discount rate B. amount of each payment C. number of payments D. net present value of the payments 2. You are obligated to pay $150 a month on a loan. Each payment is equal in amount and includes some interest and some principal. Assuming you always pay on time, the loan will be paid in full when you make your last monthly payment. Which type of loan do you have? A. interest-only B. balloon C. amortized D. pure discount 3. You want to retire on the day you have $2,000,000 in your retirement account. You expect to withdraw $12,000 a month from the account and earn 7 percent, compounded monthly during your retirement. How many years can you live after retirement without running out of money? A. 42.87 years B. 51.34 years C. 57.78 years D. You will never run out of money. 4. A preferred stock pays annual dividends of $6.50 and currently sells for $83.33 a share. What rate of return
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This document was uploaded on 08/05/2011.

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Chapter 6 quiz - Chapter 6 Student: _ 1. Which one of the...

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