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Week13_TutorialQuestions

# Week13_TutorialQuestions - SCHOOL OF BANKING AND FINANCE...

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FINS 1613 Tutorial Questions 1 SCHOOL OF BANKING AND FINANCE FINS1613 BUSINESS FINANCE Semester 2, 2011 TUTORIAL QUESTIONS WEEK 13 – REVISION 1. You deposited \$1,000 in a savings account that pays 8 percent interest, compounded quarterly. Eighteen months later, you decide to close out your account. How much money will you receive? a. \$1,171 b. \$1,126 c. \$1,082 d. \$1,163 e. \$1,008 2. What is the primary corporate objective? 3. Which of the following statements is most correct?

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FINS 1613 Tutorial Questions 2 4. Your bank account pays an 8 percent nominal rate of interest. The interest is compounded quarterly. Which of the following statements is most correct? 5. A bond with 6 years to maturity and sells at par has an 8 percent semi-annual coupon (that is, the bond pays a \$40 coupon every six months). Another bond of equal risk and maturity pays 8 percent interest annually. Both bonds are non-callable and have face values of \$1,000. What is the price of the bond that pays annual interest? a. \$689.08 b. \$712.05 c. \$980.43 d. \$986.72 e. \$992.64
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Week13_TutorialQuestions - SCHOOL OF BANKING AND FINANCE...

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