Question
can you help me right now? i need the answer in an hour 1. You plan to invest in bonds that pay 6.0%, compounded annually.
can you help me right now? i need the answer in an hour
1. You plan to invest in bonds that pay 6.0%, compounded annually. If you invest $10,000 today, how many years will it take for your investment to grow to $30,000?
- 12.37
- 13.74
- 15.27
- 18.85
Question 2.2. Suppose a State of New York bond will pay $1,000 ten years from now. If the going interest rate on these 10-year bonds is 5.5%, how much is the bond worth today?
- $585.43
- $614.70
- $645.44
- $677.71
Question 3.3. You plan to invest in securities that pay 8.0%, compounded annually. If you invest $5,000 today, how many years will it take for your investment to grow to $9,140.20?
- 5.14
- 5.71
- 6.35
- 7.84
Question 4.4. Suppose a State of California bond will pay $1,000 eight years from now. If the going interest rate on these 8-year bonds is 5.5%, how much is the bond worth today?
- $651.60
- $684.18
- $718.39
- $754.31
Question 5.5. Jose now has $500. How much would he have after 6 years if he leaves it invested at 5.5% with annual compounding?
- $591.09
- $622.20
- $654.95
- $689.42
Question 6.6. Suppose the U.S. Treasury offers to sell you a bond for $747.25. No payments will be made until the bond matures 5 years from now, at which time it will be redeemed for $1,000. What interest rate would you earn if you bought this bond at the offer price?
- 4.37%
- 4.86%
- 5.40%
- 6.00%
Question 7.7. If a firm's goal is to maximize its earnings per share, this is the best way to maximize the price of the common stock and thus shareholders' wealth.
- True
- False
Question 8.8. A $150,000 loan is to be amortized over 7 years, with annual end-of-year payments. Which of these statements is CORRECT?
- The annual payments would be larger if the interest rate were lower.
- If the loan were amortized over 10 years rather than 7 years, and if the interest rate were the same in either case, the first payment would include more dollars of interest under the 7-year amortization plan.
- The proportion of each payment that represents interest as opposed to repayment of principal would be higher if the interest rate were lower.
- The proportion of each payment that represents interest versus repayment of principal would be higher if the interest rate were higher.
Question 9.9. The disadvantages associated with a proprietorship are similar to those under a partnership. One exception relates to the more formal nature of the partnership agreement and the commitment of all partners' personal assets. As a result, partnerships do not have difficulty raising large amounts of capital. (Points : 2)
- True
- False
Question 10.10. Which of the following statements is CORRECT? (Points : 2)
- A time line is not meaningful unless all cash flows occur annually.
- Time lines are not useful for visualizing complex problems prior to doing actual calculations.
- Time lines cannot be constructed to deal with situations where some of the cash flows occur annually but others occur quarterly.
- Time lines can be constructed where some of the payments constitute an annuity but others are unequal and thus are not part of the annuity.
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