1. The value of an investment in shares of Air Canada at the end of the second year was $115,500. The returns during the first and second year were 10% and 5%, respectively. What is the value of the initial investment?

Select one:

a. $99,945.91

b. $100,434.78

c. $107,441.86

d. None of the THESE

e. $100,000

2.A 20-year bond with annual coupon payments is currently selling at $1,040. If the coupon rate is 6%, what is the current yield?

Select one:

a. 5.77%

b. $60

c. 4%

d. 6%

3.Which of the following is true?

Select one:

a. None of THESE

b. The covariance between two risky assets is a better measure of the association of returns between them than the correlation coefficient.

c. The arithmetic average return is a better measure of realized returns than the geometric average return.

d. The geometric average return is a better measure of realized returns than the arithmetic average return.

4.The decision to accept or reject independent projects with equal useful life will be the same with the net present value rule or the profitability index rule.

Select one:

True

False