7) Siebling Manufacturing Company's common stock has a beta of 0.9 . If the expected risk-free retum is 2% and the market offers a premium of 8% over the risk-free rate, what is the expected return on Siebling's common stock? A) 14.4% B) 13.4% C) 9.2% D) 5.7% 8) What is the present value of $150 received at the beginning of each year for 16 years if the required rate of return is 4% ? A) $1,210 B) $1,480 C) $1,748 D) $1,818 9) You are thinking of buying a vacation rental home. It is expected to generate cash flows of 540,000 per year in years one through four and $50,000 per year in years five through eight. If the appropriate discount rate is 10%, what is the present value of these cash flows? Assume the cash flows occur at the end of each year. A) $235,048 B) $285,288 C) 5628,230 D) $167,943 10) Piercing Publishers recently issued preferred stock with a fixued annual dividend of $3.00 per share: Investors require a 5% retum on similar preferred stock issues. The stock is currently selling for \$65. Is the stock a good buy? A) No, as it is overvalued by $10. B) Yes, as it is undervalued by $10. C) No, as it is overvalued by $.5. D) Yes, as it is undervalued by $5. 11) Which of the following is NOT an example of systematic risk? A) Inflation B) Product reeall C) Recession D) Interest rate increase 12) If you put 5700 in a savings account with a 10% annual tate of interest compounded monthly, what will the investment be worth in 2 years? A) $1,176 B) 5847 C) 5828 D) 5854 13) When a bond's coupon rate is higher than its yeild to mahurity, the bond A) will sell at par value. B) will sell at a discount from par- C) may sell at either a discount or a premium. D) will sell at a premium over par