1. The Windsor Honda offers payments of $493.19 per month for 48 months on a 2018 Civic at the complete price of $21,000 with zero down. What is the annual percentage rate (APR) of this loan? ____

A) 12%

B) 11%

C) 9%

D) 6%

2. Given a flat yield curve, the liquidity premium theory argues that the market is predicting ____

A) A mild rise in short-term interest rates in the near future, and a mild decline further out in the future

B) Constant short-term interest rates in the near future and further out in the future

C) A mild decline in short-term interest rates in the near future, and a continuing mild decline further out in the future

D) Constant short-term interest rates in the near future, and a mild decline further out in the future

3. Corporations who do not issue financial instruments such as stock or debt securities ____

A) Cannot be profitable

B) Will not be able to increase sales

C) Do not face double taxation of their profits

D) Generate sufficient funds to fulfill their needs

4. Canadian law requires interest on fixed-rate mortgages to be compounded semi-annually. With an effective annual rate of 5.65%, what is the posted annual percentage rate? ____

A) Undetermined

B) 5.725%

C) 5.572%

D) 5.257%

Hint: Rear = [1 + Rapr/m]m -1