$1.$If you would like to put $$3,600($annually$)$ in $401$K generating $8\%$ of APR, how much you will have at the end of $20$ years?

Ans: $$164,743\mathrm{.}07$

$2.$If you would like to put $$300($monthly$)$ in $401$K generating $8\%$ of APR, how much you will have at the end of $20$ years?

Ans: $$176,706\mathrm{.}12$

$3.$If you plan to buy a house priced at $$700,000$ in $5$ years, how much you need to deposit per year in a saving account promising $6\%$ of APR?

Ans: $$124,177\mathrm{.}48$

$4.$If you plan to buy a house priced at $$700,000$ in $5$ years, how much you need to deposit per month in a saving account promising $6\%$ of APR?

Ans: $$10,032\mathrm{.}96$

$5.$You would like to buy out one small business which generating annual free cash flows of $$100,000.$ If you believe the business will go on for the next $10$ years and have zero salvage value, how much is the price of the business? Here we assume $6\%$ APR.

Ans: $$736,008\mathrm{.}71$

$6.$You have an investment opportunity giving you $$5000$ at the end of each year for $6$ years, if you invest $$20,000$ now. What is your annual percentage return?

Ans: $12\mathrm{.}98\%$

$7.$You borrow $$30,000$ for $4$ years under an amortized loan plan. Its interest rate is $7\%$ APR. How much the principal amount is left at the end of $2$nd year?

Ans: Annual Payment is $$8,856\mathrm{.}84.$ Balance at the end of $2$nd year: $$16,013\mathrm{.}34$

$8.$You have a bond with $4$ years maturity and $6\%$ coupon $($interest$)$ rate. A coupon is paid annually. Its face value is $$1000.$ If a Yield to Maturity is $10\%,$ how much is the bond price?

Ans: $$873\mathrm{.}21$

$9.$You have a bond with $5$ years maturity and $6\%$ coupon $($interest$)$ rate. A coupon is paid annually. Its face value is $$1000.$ If the bond is priced at $$980,$ how much is the Yield to Maturity?

Ans: $6\mathrm{.}48\%$

$10.$You have a bond with $6$ years maturity. A coupon is paid annually. Its face value is $$1000.$ If the bond is priced at $$990$ and YTM is $7\%,$ how much is coupon payment or rate?

Ans: $$67\mathrm{.}90(6\mathrm{.}79\%).$

$11.$You have a bond with $6$ years maturity and $6\%$ coupon $($interest$)$ rate. A coupon is paid annually. Its face value is $$1000.$ The bond is priced at $$980.$ This bond carries call provision in which a bond can be called back by an issuer in three years and a call price is $$1100.$ How much is Yield to Call if called back in three years?

Ans: $9\mathrm{.}83\%$

$12.$Calculate return and risk $($standard deviation$)$ of a portfolio composed of Stock A and Stock B$.$ Weight for Stock A is $40\%.$ Weight for Stock B is $60\%.$

Stock A Stock B

$20210\mathrm{.}1-0\mathrm{.}2$

$20220\mathrm{.}20$

$20230\mathrm{.}60\mathrm{.}5$

Ans: Return is $18\mathrm{.}00\%.$ Standard Deviation is $32\mathrm{.}19\%.$

$13.$Calculate correlation coefficient of Stock A and Stock B$.$

Stock A Stock B

$20210\mathrm{.}1-0\mathrm{.}2$

$20220\mathrm{.}20$

$20230\mathrm{.}60\mathrm{.}5$

Ans: $99\mathrm{.}59\%$

$14.$Stock C has a beta of $1\mathrm{.}3.$ S&P $500$ offers an annual return of $12\%.$ Yield to Maturity of $10$ years T bond is $4\%.$ What is an expected return from CAPM?

Ans: $0\mathrm{.}144$

$15.$If CAPM estimate an expected return of Stock K is $14\mathrm{.}4\%$ but an actual return is $10\%,$ does it mean Stock K is currently overpriced?

Ans: Yes.

$16.$You form a portfolio composed of Stock K and L$.$ Stock K has a beta of $2.$ Stock L has a beta of $1\mathrm{.}2.$ You put $30\%$ of your money on Stock K and $70\%$ on Stock L$.$ How much is a beta of your portfolio?

Ans: $1\mathrm{.}44$