7) What is the present value of $100 promised one year from now at 10% annual interest? 7) _______

A) $89.50 B) $90.91 C) $90.00 D) $91.25

8) A credit card that charges a monthly interest rate of 1.5% has an effective annual interest rate of: 8) _______

A) 15.0% B) 18.0% C) 17.50% D) 19.6%

9) The fundamental characteristics influencing the value of a financial instrument include each of the following except: 9) _______

A) the likelihood of payment.

B) when the promised payment will be made.

C) the size of the payment promised.

D) where the instrument is traded.

10) Secondary financial markets: 10) ______

A) are only for stock.

B) are financial markets where existing securities are bought and sold.

C) eliminate the transaction costs for buyers and sellers.

D) are financial markets for all financial instruments rated less than investment grade.

11) An over-the-counter (OTC) market is: 11) ______

A) made up of dealer who buy and sell only for their own accounts.

B) made up of dealers who only sell government bonds.

C) an example of a centralized market.

D) made up of dealers who buy and sell for their customers and for their own accounts.

12) Non-depository institutions would include all of the following except: 12) ______

A) insurance companies. B) finance companies.

C) credit unions. D) pension funds.