21. A bond dealer quotes a bid price of 96 and an ask price of 96.2 Assuming a par value of $1,000, the quotes indicate that A. you can purchase this bond from the dealer for $962 and sell it to him for $960 B. You can sell this bond to the dealer for $962. C. You can buy or sell at the average of the two prices. D. None of the above. 22. Janet wants to purchase a business that promises you a free cash flow of $50,000 next year and nothing thereafter. Janet has determined that the risk of the business is high and therefore requires a 15% rate of return. What is the fair value of this business? A. B. C. D. E. $40,000 $41,000.25 $43,478.26 $44,478.56 None of the above E. None of the above 23. A jackpot winner is promised $100,000 every year for the next 30 years. Assuming a discount rate of 7%, how much is the jackpot worth now? A. $1,125,778.33 B. $1,190.000.66 C. $1,227,365.40 D. $1,240,904.12 E. None of the above FIN 381 Test 2A fall 2020.pdf (page 7 of 7) - Edited U Q Search D. E. A $1,240,904.12 None of the above 24. The value of an asset equals the ... of all future cash flows. A. B. C. D. 25. future value market value coupon value None of the above. Which of the following is not true about a bond? A bond A. is an IOU B. may be corporate, government, or municipal C. has a par or face value D. may have a conversion feature allowing the holder to convert the bond into the issu common stock. E. All of the above are true