8- You work for a furniture store. You normally sell a living room set for $2,750 and finance the full purchase price for 25 monthly payments at 24% APR. You are planning to run a zero-interest financing sale during which you will finance the set over 25 months at 0% interest. How much do you need to raise the price of the bedroom set during the sale in order to earn your usual combined return on the sale and the financing? A) $110 B) $140 C) $692 D) $771 E) $840 9. Which one of the following statements concerning an ordinary annuity is true? A) If two annuities are equal in every way except that one is an ordinary annuity and one is an annuity due, then the ordinary annuity will have a lower future value than the annuity due. B) If two annuities are equal in every way except that one is an ordinary annuity and one is an annuity due, then the ordinary annuity will have a larger future value than the annuity due C) The future value of an ordinary annuity can be computed by multiplying the future value of an annuity due by (1+r). D) If two annuities are equal in every way except that one is an ordinary annuity and one is an annuity due, then the ordinary annuity will have a larger present value than the annuity due. E) An ordinary annuity consists of equal payments that occur at the beginning of each period over a set period of time. 10- The call premium is: A) Equal to the par value but paid prior to maturity. B) Additional compensation paid by a bondholder in exchange for an early redemption. C) The same as the face value but paid prior to maturity. D) An amount that decreases the closer the bond gets to its maturity date. E) None of the above. 11- Suppose you are trying to price a bond. Which of the following is false? A) All else the same, bonds with larger coupon payments will have a higher price today B) Bonds with low coupon payments are generally (all else the same) more sensitive to changes in interest rates than bonds with higher coupon payments. C) When market interest rates rise, bond prices will fall, all else the same. D) Bonds with long maturities are generally (all else the same) more sensitive to changes in interest rates than bonds with shorter maturities. E) None of the above. 1620 words TX