1) If we place $1,000 in a saving account paying an APR of 5% compounded annually, how much will our saving to in 10 years? A) $614 B) $1,500 C) $1,050 D) $1,629

2) Put the following in order of their claim on assets of a firm, starting with the LAST to have a claim: A) Bond B) Common Stock C) Preferred Stock

3) You are planning to invest in a simple portfolio consisting of two mutual funds, one investing in stocks and the other in bonds, if you expect the stock fund to return 10% per year and the bond fund to return 6% per year, and your allocation is 40% of your total investment to the stock fund and 60% to the bond fund, then what is the expected rate of the portfolio? A) 8% B) 7,6% C) 10% D) 6%

4) Preferred stock differs from common stocks in that: A) failure to pay dividends to preferred stockholders will send the firm into bankruptcy B) Preferred stocks usually carry voting rights C) preferred stocks usually have a maturity date D)preferred stock dividends are fixed

6) Charlie Corporation has two bonds outstanding. Both bonds mature in 10 years, have a face value of $1,000, and have an annual expected return of 8%. One bond is a zero coupon bond and the other bond has an annual coupon rate of 8%. which of the following statements is true? A) The zero coupon bond must have a higher price because of its greater capital gain potential B) he zero coupon bond must sell for a lower price than the bond with an 8% coupon rate. c) all rational investors will prefer the 8% bond because it pays more interest. D) both bonds must sell for the for the same price if markets are in equilibrium.