1. New Surf Shop has $1,000 face value bonds outstanding. These bonds pay interest semi-annually that mature in 6 years, and also have a 9 percent coupon. The current price is $1,110. What would be the yield to maturity?

a) 3.37% b) 5.90% c) 4.41% d) 6.74%

2. Jose Rodriguez Gonzales has to borrow $30,000 for 5 years. The loan will be repaid in one lump sum at the end of the loan term. Which one of the following interest rates would be the best option for Jose?

a) 2.2% interest, compounded monthly b) 2.2% interest, compounded annually c) 4.4% interest, compounded quarterly d) 4.4 interest, compounded monthly

3.You would like to save $500 a month for the next 15 years and hope to earn an average rate of return of 12 percent. How much money will you have after 15 years if you invest your money at the beginning of each month?

a) $274,853.07 b) $283,930.30 c) $260,482.99 d) $252,288.00

4. Blue Cafe is interested in adding in a new location. They plan on spending $60,000 to refurbish an old shop to create the new one. The firm borrows 80 percent of the refurbishment cost with 6 percent interest for 5 years. What is the amount of each monthly payment?

a) $927.97 b) $816.41 c) $714.49 d) $612.33

5. A business is borrowing $300,000 today for 10 years. The loan is an interest-only loan with an 8 percent APR. Payments are to be made annually. What is the amount of the first payment?

a) 24,000 b) 30,000 c) 56,233 d) 35,579