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MULTIPLE C HOICE. Choose the one alternative that best completes the statement or answers the question. 1) If you were offered $1079.50 ten years from now in return for an investment currently. Assume you 1) can earn 8% annual rate on the investment. How much you are required to invest today? A) S500.02 B) $455.99 C) $46298 D) $576.61 2) Mr-Bill purchased a house for $100,000 He paid s20,000 down and agreed to pay the rest over the 25 equal end-of-year payments. The interest rate charged by lender is 9% annual 2) next 25 years in rate. Calcualte the equal payment A) $8,144.50 B) $10,180.63 C) $8,380. 63 D) $$8,732.72 3) 3) You pay S1 020 for present using credit card. The credit card company charges you (AIR) 24% u interest compounded monthly. If you plan to pay it off by equal payment for 10 months, What is the monthly payment? A) $119.58 B) $104.42 C) $113.55 D) $79.38 4) Assume an interest rate of 10 percent. How much do you have to deposit today so that beginning 6 4) years from now you can withdraw $1,000 a year (at the end of the year) for the next 5 years? D) $2,415.23 A) $2.139.80 B) $2,353.78 C) $2,578.86 5) 5) Claculate portolfio expect return and beta. 10% $1,000 Return 15% Investment amount$2,000 Beta 18% $2,000 2.4 A) 15.2%; 198 B) 14% 2 C) 13.56%; 2.1 D) 17.2% 1.98 6) The expected return on the market potfolio is 15% and its market risk premiumis 12%, Stock A has 6) a beta of 1.2. What is the required rate of return on Stock A according to CAPM? A) 15% B) 21% C) 17.4% D) 14.4% 7) A bond issued by XYZ has a coupon rate of 9% and par value is $1,000. The bond will matures in 7 7) years. What is the value of this bond if the investor's required rate of return is 15%? A) $1282.35 B) $1,006.72 C) $1,301.98 D) $750.37 8) XYZ Corporation just issued S 1,000 par value 20-year bonds. The coupon rate is (APR) 64%, paid 8) semiannually. Investors require a rate of 7% on the bonds, what is the value of the bonds to investors? A) $935.93 B) $1,412.16 C) $1,619.30 D) $683.36 9) XYZ Corporation Bond has a coupon rate of (APR) 6%, paid semiannually. The face value is S 1,000 9) and the bonds mature on January 1, 2021. What is yield to maturity (for 6 months) for XYZ Corporation Bond on January 1, 2012 if the market price on that date is $950? A) 2.25% B) 3.38% C) 4.43% D) 5.50% 10) 10) What is the current yield of a bond that matures in 5 years, has a par value of $1,000, a coupon rate 8% paid quarterly, and is currently selling for $982? A)8% B) 2.04% C) 8.15% D) 2%