5. Conrad bought 125 shares of Google Inc. at $795.01 per share on May 1, 2013. Now that the month is over, he wants to calculate his holding-period return for his investment during that period. On May 31, 2012 Google Inc. opened at $868.12 per share and closed at $871.218 per share. What was Mikes holding period return for May 2013? Round to two decimal places.

1. 8.95%

2. 9.61%

3. 8.96%

4. 9.59%

5. 8.87%

4. Mike needs to have $120,000 in 6 years to pay for his daughters college expenses. To have this amount ready, how much would John have to invest now if his preferred investment is paying 4% interest?

	$96,685.68
	$94,837.74
	$98,859.32
	$100,215.87
	None of these is true.

7. After calculating the Net Present Value of several competing project proposals their company may pursue, management discussed the pros and cons of each project. Management chose to move forward with the project which had the highest Net Present Value. What effect will this have on shareholder value?

1. It is not known if it will add or destroy value.

2. It increases shareholder value.

3. It has little effect on shareholder value.

4. It will lower shareholder value because it will require investment.

5. It will not affect shareholder value until the project is completed.

9. If a $100 bond is trading at $102, it is trading at a _______________.

(a) Discount

(b) Extra Fee

(c) Premium

(d) Cash Basis

(e) Par

10. When considering an investment what is most true about risk versus return?

(a) As risk increases the return usually decreases

(b) As risk increases the return usually increases

(c) As risk decreases the return usually increases

(d) As risk increases the return usually remains steady

(e) As risk decreases the return usually increases

13. Financial ratios may not help in which of the following situations?

(a) Comparing the firms performance against its peers

(b) Measuring the firms morale

(c) Comparing the efficiency of different teams within the firm

(d) Measuring the firms performance through time