1. If you borrow $200,000 at an annual rate of 8.00% for a 10-year period and repay with 10 equal annual end-of-the-year payments of $29,805.90, then you have just repaid what type of loan?

1. Amortized loan
2. Interest-only loan
3. Discount loan
4. Compound loan
5. Annuity-due loan

2. If you have taken up a discount loan and borrowed $100,000 at an annual interest rate of 10% for eight years, what is the annual repayment (prior to maturity) on the discount loan?

1. $0.00
2. $6,000.00
3. $8,333.33
4. $12,161.29
5. $13,000.00

3. The following table summarises the estimates provided by the investment banking firm that your company hired. The investment banking firm has estimated what your companys new issue of bonds is likely to sell for under several different economic conditions. What is the expected (average) selling price of the bond?

	Recession	Steady	Boom
Probability	.65	.25	.10
Bond price	$970	$1,000	$1,150

1. $995.50
2. $1,007.50
3. $1,040.00
4. $1,100.33
5. none of the above

4. Which of the statements below is FALSE?

1. A company could show a loss for the operating period but have generated positive cash flow for the business.
2. Profits are an accounting measure of performance during a specific period of time.
3. To obtain the operating cash flow, given the net income, we add back depreciation and subtract taxes.
4. Cash flow is an accounting measure of performance during a specific period of time.
5. The timing and amount of cash flow are critical to business decisions, business growth, and ultimately business success.

5. Which of the following best demonstrates the implementation of diversification for your investment fund that you currently have?

1. Investing the entire investment fund in Auckland properties.
2. Investing the entire investment fund in government bonds.
3. Investing the entire investment fund in A2 Milk shares.
4. Investing the entire investment fund in a managed fund that mimics the NZX50 index.
5. Investing the entire investment fund in Fisher & Paykel Healthcare shares.