15. Zoom Inc's 6-year bonds yield 6.50% and 6-year T-bonds yield 5.25%. The real risk-free rate is r* = 0.5%, the default risk premium for Zoom's bonds is DRP = 0.40%, the liquidity premium on Zoom's bonds is LP = 2.2% versus zero on T-bonds, and the inflation premium (IP) is 1.5%. What is the maturity risk premium (MRP) on all 6-year bonds? *

a) 0.73%

b) 0.81%

c) 0.90%

d) 1.25%

e) None of the above

16. A real estate investment will pay $15,000 at end of year 1 ; $ 25,000 end of year 2 and $50,000 end of year 3. Note that the discount rate is 5 percent. What is the investments present value? *

a) $55,400.55

b) $61,250.36

c) $90,000.50

d) $80,153.33

e) None of the above

17. Your father gets a good job and wants to deposit in his account $1200 at the end of each year for 3 years. He earns 2% interest paid daily. How much will be in his account after 3 years? *

a) $3,900.90

b) $3,672.48

c) $4,200.36

d) $4,500.05

e) None of the above

18. What is the Present value of USD 15,000 that you will receive end of year 3 if the interest rate is 8% compounded semi-annually? *

a) $11,500

b) $12,652

c) $11,855

d) $12,323

e) None of the above