1.In three years you will begin receiving an annual payment of $600 that will be made for two years. If the annual interest rate is 12%, what will be the balance in your account at the end of the fourth year?

$1,200

$1,260

$1,272

$1,344

$1,425

2. Your company is planning to borrow $1,000,000 on a 5-year, 15%, annual payment, fully amortized term loan. What fraction of the payment made at the end of the second year will represent repayment of principal?

55.02%

57.18%

60.83%

64.45%

69.36%

If a firms earnings per share grew from $1 to $2 over a 10-year period, the total growth would be 100%, but the compound annual growth rate would be:

		less than 11% (but at least 10%)
		less than 10% (but at least 9%)
		less than 9% (but at least 8%)
		less than 8% (but at least 7%)
		less than 7% (but at least 6%)

All of the following statements are true except

		3. The expected return on an asset held by itself is the weighted average of the possible outcomes, where the weights reflect the probability of each outcome.
		The risk of an asset held by itself can be measured by the standard deviation of the expected returns.
		The expected return on a portfolio of assets is the weighted average of the expected returns of the assets in the portfolio.
		The standard deviation of a portfolio of assets is the weighted average of the standard deviations of the assets in the portfolio.
		All of the above statements are true.