1) A bank offers a loan that will requires you to pay 6% interest compounded monthly. Which of the following is closest to the EAR charged by the bank?

a. 5.84%

b. 6%

c. 6.17%

d. 72%

e. 6.48%

Question 2(1 point)

Your bank account pays monthly interest with an APR of 8%. You are planning to buy a house in 6 years, and you wish to save $40,000 for the down payment. If you currently have no money in your account, how much will you need to save at

the end of each month?

a. $451.18

b. $500.34

c. $555.56

d. $434.66

e. 4438.53

Question 3(1 point)

The effective annual rate (EAR) for a loan with a stated APR of 8% compounded monthly is closest to:

a. 8.3%

b. 8.33%

c. 8.0%

d. 8.24%

e. 8.16%

Question 4(1 point)

What is the yield to maturity of a one-year, risk-free, zero-coupon bond with a $10,000 face value and a price of $9600 when released?

a. 3.212%

b. 4.000%

c. 4.167%

d. 9.600%

e. 5.140%

Question 5(1 point)

What is the yield to maturity of a ten-year, $1000 bond with a 5.2% coupon rate and semi-annual coupons if this bond is currently trading for a price of $884?

a. 5.02%

b. 6.23%

c. 6.82%

d. 12.46%

e. 5.2%

Question 6(1 point)

How much will the coupon payments be of a 30-year $10,000 bond with a 4.5% coupon rate and semi-annual payments?

a. $30

b. $225

c. $350

d. $450

e. $45

Question 7(1 point)

) Fanshaw Corporation is expected to pay an annual dividend of $0.20 per share in the coming year, and to trade for $15.15 at the end of the year. If investments with the same risk as Fanshaw's stock have an expected return of 10.75%, what is the most you would pay today for Fanshaw's stock?

a. $15.15

b. $15.35

c. $13.50

d. $14.95

e. $13.86

Question 8(1 point)

Garville Corporation has a current stock price of $7.43 and is expected to sell for $8.14 in one year's time, immediately after it pays a dividend of $0.35. Which of the following is closest to Garville's equity cost of capital?

a. 4.8%

b. 6.1%

c. 6.7%

d. 9.6%

e. 14.3%

Question 9(1 point)

Herring Fisheries plans to pay $0.65 per share in dividends in the coming year. If its equity cost of capital is 11%, and dividends are expected to grow by 2.5% per year in the future, what is the value of Herring's stock?

a. $24.05

b. $7.84

c. $5.91

d. $7.65

e. $26.00