1.

You are considering an (ordinary) annuity investment which costs $100,000 today and offers a return of 3%. The annual payment on the annuity is $5,000. How long is the annuity investment?

Group of answer choices

20 years

21.49 years

15.90 years

13.42 years

2.

If your bank quoted a 12% interest rate on your account, which is compounded quarterly, which of the following implications is correct?

Group of answer choices

Your effective annual interest rate on this account is below 12%

The monthly interest on your account is 1%

Your effective annual interest rate on this account is above 12%

Your effective annual interest rate on this account is 12%

3.

Firm A has ROA of 6%. If its sales are $6 million, debt ratio is 0.6 and total liabilities are $3 million. What is As ROE?

Group of answer choices

4%

15%

12%

Not enough information to derive ROA