13.The term “capital structure” refers to: A.The manner in which a firm obtains its long-term sources of funding. B.The length of time needed to repay debt. C.The firm’s capital budgeting activities. D.Which specific assets the firm should invest in. E.The mix of current and fixed assets. 14.A company is planning to set aside money to repay $100 million in bonds that will be coming due in 10 years. If the appropriate discount rate is 9%., how much money would the company need to set aside at the beginning of each year for the next 10 years to be able to repay the bonds when they come due? Use the following to answer questions 15-16: MadLabs has been a hot stock the last few years, but is risky. The expected returns for MadLabs are highly dependent on the state of the economy as follows: State of EconomyProbabilityMadLabs ReturnsDepression .05 -50% Recession .10 -15% Mild Slowdown .20 5% Normal .30 15% Broad Expansion .35 40% 15.The expected return on MadLabs is: 16.The standard deviation of MadLabs returns is
FNA2004 Midterm 517.According to the CAPM A.the expected return on a security is negatively and non-linearly related to the security's beta. B.the expected return on a security is negatively and linearly related to the security's beta. C.the expected return on a security is positively and linearly related to the security's variance. D.the expected return on a security is positively and non-linearly related to the security's beta. E.the expected return on a security is positively and linearly related to the security's beta18.Your favorite aunt has decided to save $12,000 at the start of each year, starting now for the next 10 years. At the end of ten years, she will withdraw equal installments from this accumulated savings for the next 15 years of her life. Assume withdraw occurs at the end of each year, how much will each installment amount be if she is earning 8% on her savings?
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