QUESTION 1

Acme's stock traded at $100 on January 2 and at $105 on January 3. What is the percent change (holding period return)? (Round your answer to the nearest whole number and leave off the "%").

QUESTION 2

A firm has an ACP of 38 days and its annual sales are $5.3 million. What is its account receivable balance?

1. $759,021
2. $619,304
3. $551,781
4. $692,098

QUESTION 3

Consider the following three bond quotes; a Treasury note quoted at 102.30, and a corporate bond quoted at 99.45, and a municipal bond quoted at 102.45. If the Treasury and corporate bonds have a par value of $1,000 and the municipal bond has a par value of $5,000, what is the price of these three bonds in dollars?

1. $1,002.30, $994.50, $5,012.25 respectively
2. $1,002.30, $1,000, $1,000, respectively
3. $1,000, $1,000, $5,000, respectively
4. $1,023.00, $994.50, $5,122.50, respectively

QUESTION 4

If Zeus Energy bonds are upgraded from BBB- to BBB+, which of the following statements is true?

1. Interest rates required on new bond issue will increase.
2. The current bond price will decrease.
3. The current bond price will increase and interest rates on new bonds issue will decrease.
4. The current bond price will decrease and interest rates on new bonds issue will increase.

QUESTION 5

A corporate bond has a face value of $1,000 and a coupon of 5%. How much is its semi-annual interest payment? (Enter your answer in dollars, without the "$".)

QUESTION 6

Compute the future value in year 10 of a $1,000 deposit in year 1, and another $1,500 deposit at the end of year 4 using an 8 percent interest rate.

1. $3,120.73
2. $5,397.31
3. $4,500.00
4. $4,379.31

QUESTION 7

The length of time of the annuity is very important in accumulating wealth within an annuity. What other factor also has this effect?

1. the future value
2. the present value
3. the time line
4. interest rate for compounding

QUESTION 8

A dollar paid (or received) in the future is

1. not worth as much as a dollar paid (or received) today.
2. worth more than a dollar paid (or received) today.
3. worth as much as a dollar paid (or received) today.
4. not comparable to a dollar paid (or received) today.

QUESTION 9

Calculate the price of a zero coupon bond that matures in 10 years if the market interest rate is 6 percent. (Assume semi-annual compounding and $1,000 par value.)

1. $558.66
2. $940.00
3. $553.68
4. $1,000.00

QUESTION 10

Regarding a bond's characteristics, which of the following is the principal loan amount that the borrower must repay?

1. Call premium
2. Par or face value
3. Maturity date
4. Time to maturity value