Questlon 1 10 out of 10
points
Whats the present value ofa 4year ordinary annuity of $2,250 per year plus an additional $3,000 at the end onear 4 ifthe interest rate is 5%?
Selected Answer: a b. $10,4
Personal Financial Planning
The number one goal of Century Management is to assist our clients in the attainment of
financial security through financial planning and money management. The financial pl
An individual who elects to receive a given sum of money later than it is due incurs
an opportunity cost. True
A sum of money invested at 9 percent simple interest per year will grow to a larger
amoun
1. Which of the following statements is correct?
d. Time lines can be constructed where some of the payments constitute an
annuity but others are unequal and thus are not part of the annuity.
2. Suppo
Final Exam Review Questions: Practice Test 1
1.Which of the following types of questions is likely to be the most effective in client
counseling?
open-ended
close-ended
leading
either/or
2. If $100 is
Risk-averse investors generally must sacrifice some expected return in order to
reduce the variation in possible outcomes from an investment decision. True
In the field of finance, risk seeking refers
1. A professional is a person engaged in a field that requires, among other things, a
threshold entrance requirement. True
2. A client's risk tolerance is easy to measure. False
3. A practice standard
1. Which of the following statements is CORRECT?
a. Two bonds have the same maturity and the same coupon rate. However,
one is callable and the other is not. The difference in prices between the bonds
Final Exam Review Questions: Practice Test 1
1.Which of the following types of questions is likely to be the most effective in client
counseling?
open-ended
close-ended
leading
either/or
2. If $100 is
1. The present value of a $20,000 perpetuity at a 7 percent discount rate is
Answers:
$285,714.
2. The future value of an ordinary annuity of $1,000 each year for 10 years,
deposited at 3 percent, is
MID TERM EXAM
1.
Question 1
Which of the following statements is CORRECT?
One of the disadvantages of incorporating your business is that you could
become subject to the firm's liabilities in the even
Question 1
1.
Suppose you deposit $3,000 today into an account that will earn 5
percent interest. How much will your account be worth at the end of 30
years?
$12,96
6
$90,00
0
$199,3
17
$4,500
3.333 p
1.
"A stock is expected to pay a dividend of $0.75 next year. The required
rate of return is r = 10.5%, and the expected constant growth rate is g =
6.4%. What is the stock's current price?"
17.3
9
17
Question 1
1.
Suppose 1-year T-bills currently yield 7.00% and the future inflation
rate is expected to be constant at 3.20% per year. What is the real riskfree rate of return?
3.80
%
3.99
%
4.19
%
4.
Save and Submit
Question 1
1.
Stocks A and B each have an expected return of 15%, a standard
deviation of 20%, and a beta of 1.2. The returns on the two stocks have a
correlation coefficient of +0.6.
Question 1
1.
Consider an investment that will cost $25,000 and generate the
following stream of cash flows in the future:
year $
1
6,500
2
6,500
3
10,000
4
12,000
5
12,000
What is the net present val
Question 1
1.
Anderson Systems is considering a project that has the following cash
flow and WACC data. What is the project's NPV?
WACC: 9.00%
Year
Cash flows
0
1
-$1,000
2
$500
3
$500
$500
265.6
5
27
Question 1
1.
The Lincolns are considering an investment that is expected to pay
$750 per month for the next 10 years. If their required rate of return is 9.5
percent, how much is this investment wort
Save and Submit
Question 1
1.
"You were hired as a consultant to Giambono Company, whose target
capital structure is 40% debt and 60% common equity. The after-tax cost
of debt is 6.00% and the cost of
Vinh Tran
Chap 3
3-1.
a.
b.
c.
d.
e.
f.
g.
h.
Total debt = short-term debt (notes payable) + long-term debt = 150,000 + 750,000 = 900,000
Total liabilities and equity = Total assets = 2,500,000
Curren