QUESTION 1

Jessica wants to buy a house six years from now. She will need $36,000 in cash to do so. How much does she have to deposit today to achieve her goal if she can earn 7.5 percent compounded annually?

		21,986.54
		21,222.48
		23.326.61
		23,416.67

10 points

QUESTION 2

Your best friend borrowed $5,000 from you three years ago. At that time, it was agreed that you would charge him 5 percent interest compounded annually. The day after he borrowed the money, he skipped town and you had not heard from his until this morning. This morning he contacted you, apologized, and wants to meet you this afternoon to repay you the entire amount he now owes you. How much will he need to pay you this afternoon?

		5,788.13
		6,011.22
		6,138.99
		6141.51

10 points

QUESTION 3

Based on the Rule of 72, how many years will it take to quadruple your money if you can earn an 8 percent rate of return?

		4.5 years
		9.0 years
		13.5 years
		18.0 years

10 points

QUESTION 4

A zero coupon bond has a yield to maturity of 6.33 percent and 12 years until it fully matures. What is the current price of this bond if the face value is $1,000?

		473.39
		478.77
		688.04
		692.51

10 points

QUESTION 5

To trade securities on the floor of the NYSE, exchange members must purchase a:

		seat
		post
		dealer spot
		trading license

10 points

QUESTION 6

You would like to earn a 9.5 percent rate of return on a 9 percent preferred stock. that sells for $100 per share. How much are you willing to pay for 10 shares?

		94.74
		105.56
		947.37
		1055.56

10 points

QUESTION 7

Stu owns shares of Markley preferred stock which he says provides him with a constant 13.6 percent rate of return. The stock is currently priced at $51.47 a share. What is the amount of the dividend per share?

		2.64
		3.78
		5.85
		6.26
		7.00

10 points

QUESTION 8

Wilmington Importers preferred stock pays a $5 annual dividend. What is the maximum price you are willing to pay for one share of this stock if your required return is 15.5 percent?

		32.26
		35.48
		72.86
		77.50

10 points

QUESTION 9

Payments made by a corporation to its shareholders in the form of either cash or shares of stock are called:

		retained earnings
		net income
		dividends
		redistributions

10 points

QUESTION 10

The market in which new securities are originally sold to investors is called the _____ market.

		Primary
		Auction
		Over-the-counter
		Secondary