4. To value future payoffs, what discount rate does an investor use that reflects the return the investor expects based on the perceived level of risk on the investment.

a. Coupon rate

b. market rate

c. Cost of Capital

d. Intrinsic rate

e. Internal rate of return

5. The forecasted future payoffs in the dividend discount model is

a. Dividends

b. Profits

c. Excess earnings

d. Free cash flow

6. An annuity requires all three: (1) series must be of equal amounts, (2) payment must occur at equally spaced points in time, and (3) [a]

_________________________

7. A series of equal payments, equally spaced, is known as a

_________________________

8. To determine the intrinsic value of a bond, you need to know the following:

_________________, _________________ and ___________________.