Please answer all the questions below, thank you!

23. Sara invested $500 six years ago at 5 percent interest. She spends her earnings as soon as she earns any interest so she only receives interest on her initial $500 investment. Which type of interest is Sara earning? A. free interest

B. complex interest

C. simple interest D. interest on interest

E. compound interest

24. Andy deposited $3,000 this morning into an account that pays 5 percent interest, compounded annually. Barb also deposited $3,000 this morning into an account that pays 5 percent interest, compounded annually. Andy will withdraw his interest earnings and spend it as soon as possible. Barb will reinvest her interest earnings into her account. Given this, which one of the following statements is true?

A. Barb will earn more interest the first year than Andy will. B. Andy will earn more interest in year three than Barb will. C. Barb will earn interest on interest. D. After five years, Andy and Barb will both have earned the same amount of interest.

E. Andy will earn compound interest.

33. Mary just purchased a bond which pays $60 a year in interest. What is this $60 called? A. coupon B. face value C. discount D. call premium E. yield

34. Bert owns a bond that will pay him $75 each year in interest plus a $1,000 principal payment at maturity. What is the $1,000 called? A. coupon B. face value C. discount D. yield E. dirty price

39.What is the model called that determines the present value of a stock based on its next annual dividend, the dividend growth rate, and the applicable discount rate? A. zero growth B. dividend growth

C. capital pricing D. earnings capitalization

E. discounted dividend

40. What are the distributions to shareholders by a corporation called?

A. retained earnings B. net income C. dividends

D. capital payments

E. diluted profits

41.Which one of the following represents the capital gains yield as used in the dividend growth model?

A. D1

B. D1/P0

C. P0 D. g E. g/P0