1) What is the present value of $1,000 to be received 10 years from today? Assume tnat the investment pays 8.5% and it is compounded monthly. A) $3,106 B) 5833 C) 5443 D) $429 2) Edison Power and Light has an outstanding issue of cumulative preferred stock with an ansual fixed dividend of $2.00 per share. It has not paid the preferred dividend for the last 3 years, but intends to pay a dividend on the common stock of $1.20 per share in the coming year. Before Edison can pay a dividend on the common stock. A) preferred shareholders must receive dividends totaling $6.00 per share. B) preferred shareholders must receive dividends totaling $8.00 per share. C) preferred shareholders must receive dividends totaling $7.20 per share. D) preferred shareholders must receive dividends totaling $2.00 per share. 3) You are considering investing in a project with the following possible outcomes: Calculate the expected rate of retum for this investment. A) 7.0% B) 6.3% C) 8.3% D) 9.8% 4) An investor will get maximum risk reduction by combining assets that are A) negatively correlated. B) perfectly, positively correlated. C) positively correlated. D) uncorrelated. 5) Gina plans to retire at the end of 40 years. Gina's plan is to invest her money by depositing into an IRA at the end of every year. What is the amount that she needs to deposit annually in order to accumulate $1,000,000 ? Assume that the account will earn an annual rate of 11.5%. A) $1,497 B) $3,622 C) $5,281 D) $75 6) The most popular index used by banks when adjusting interest rates on short-term operating loans is A) the 6 month Treasury Bill. B) LIBOR. C) the S\&P 500. D) the inflation rate