A financial analyst tells you that investing in stocks will allow you to double your money of $1,000 in 5 years. What annual rate of return is the analyst assuming you can earn? 10.41% 9.87\% 8.76\% 14.87% Beta is a statistical measure of total risk the standard deviation. unsystematic risk the relationship between an investment's returns and the market retum. If you put $20 in a savings account at the beginning of each month for 15 years, how much money will be in the account at the end of the 10th year? Assume that the account earns 12% compounded monthly and round to the nearest $1. $1,200 $2,323 $3,485 $4,647 You decide you want your child to be a millionaire. You have a son today and you deposit $10,000 in an investment account that earns 8% per year. The money in the account will be distributed to your son whenever the total reaches $1,500,000. How old will your son be when he gets the money (rounded to the nearest year)? 82 years 74 years 65 years 49 years Project Alpha has an internal rate of return (IRR) of 15 percent. Project Beta has an IRR of 14 percent. Both projects have a required return of 12 percent. Which of the following statements is MOST correct? If the required return were less than 12 percent, Project Beta would have a higher IRR than Project Alpha. Project Alpha must have a higher NPV than Project Beta. Project Beta has a higher profitability index than Project Alpha. Both projects have a positive net present value (NPM). D'Anthony borrowed $50,000 today that he must repay in 12 annual end-of-year installments of $5,000. What annual interest rate is D'Anthony paying on his loan? 5.556%33.33%3.333%2.92% Wildings, Inc. common stock has a beta of 1.5. If the expected risk free return is 4% and the expected market risk premium is 9%, what is the expected return on Wildings' stock? 14.8% 10.0% 12.0% 17.5% If we are fully diversify a portfolio, then what is the appropriate measure of risk to use to reduce market risk? beta expected return standard deviation tisk-free rate of return Marble Corp. has a beta of 2 and a standard deviation of returns of 20%. The return on the market portfolio is 15% and the risk-free rate is 4%. According to CAPM, what is the required rate of return on the stock? 26.0%23.5%37.5%31.5% DYI Construction Co. is considering a new inventory system that will cost $700,000. The system is expected to generate positive cash flows over the next four years in the amounts of $350,000 in year one, $325,000 in year two, $150,000 in year three, and $180,000 in year four. DYI's required rate of return is 9%. What is the internal rate of return of this project? 13.68% 19.21% 11.57% 15.13% You charged $1,000 on your credit card for Christmas presents. Your credit card company charges you 24% annual interest, compounded monthly. If you make the minimum payments of $25 per month, how long will it take (to the nearest month) to pay off your balance? 54 months 81 months 79 months 94 months What is the present value of an annuity of $4,000 received at the beginning of each year for the next eight years? The first payment will be received today, and the discount rate is 10% (round to nearest \$1). $25,699$36,288$23,473$24,132 Assume that Bunch Inc. has an issue of 18 -year $1,000 par value bonds that pay 6% interest, annually. Further assume that today's required rate of return on these bonds is 5%. How much would these bonds sell for today? $1,032.56$1,134.88$1,108.28$1,233.79 Assume that you have $100,000 invested in a stock that is returning 14%, and $200,000 invested in a stock that is returning 18%. What is the expected return of your portfolio? 13.25% 15.78% 16.67% 14.97% Auto Loans R Them loans you $24,000 for four years to buy a car. The loan must be repaid in 48 equal monthly payments. The annual interest rate on the loan is 9 percent. What is the monthly payment? $563.82$543.79$597.24$500.92
