Question 1 of 25 Steve and Ed are cousins who were both born on the same day, and both turned 25 today. Their grandfather began putting $2,100 per year into a trust fund for Steve on his 20th birthday, and he just made a 6th payment into the fund. The grandfather (or his estate's trustee) will make 4o more $2,100 payments until a 46th and final payment is made on Steve's 65th birthday. The grandfather set things up this way because he wants Steve to work, not be a "trust fund baby," but he also wants to ensure that Steve is provided for in his old age. Until now, the grandfather has been disappointed with Ed, hence has not given him anything. However, they recently reconciled, and the grandfather decided to make an equivalent provision for Ed. He will make the first payment to a trust for Ed today, and he has instructed his trustee to make 40 additional equal annual payments until Ed turns 65, when the 41st and final payment will be made. If both trusts earn an annual return of 8 % , how much must the grandfather put into Ed's trust today and each subsequent year to enable him to have the same retirement nest egg as Steve after the last payment is made on their 65th birthday? retirement nest egg as Steve after the last payment is made on their 65th birthday? Assume that all payments are made at the end of the year. a. $2,660 b. $3,255 c. $3,067 d. $3,129 e. $3,036 o 0Icon Key C Question 1 of 25 Question 2 of 25 Assume that you are the portfolio manager of the SF Fund, a $3 million hedge fund that contains the following stocks. The required rate of return on the market is 11.00 % and the risk-free rate is 2.00 %. What rate of return should investors expect (and require) on this fund? Do not round your intermediate calculations. Beta Stock Amount $1,075,000 1.20 A $675,000 0.50 $750,000 1.40 D $500,000 0. $3,000,000 a. 9.71% b. 10.82% c. 9.37% d. 9.93 % e. 11.16% O 0Icon Key Question 2 of 25 U Question 3 of 25 O'Brien Ltd.'s outstanding bonds have a $1,00o par value, and they mature in 25 years. Their nominal annual, not semiannual yield to maturity is 9.25 % , they pay interest semiannually, and they sell at a price of $875. What is the bond's nominal interest rate? coupon a. 8.76% b. 7.96% c. 6.37% d. 6.69% e. 6.05% O Icon Key Question 3 of 25 a O O O O O 4Question 4 of 25 A $150,000 loan is to be amortized over 7 years, with annual end-of-year payments. Which of these statements is CORRECT? a. The proportion of interest versus principal repayment would be the same for each of the 7 payments. b. If the loan were amortized over 10 years rather than 7 years, and if the interest rate were the same in either case, the first payment would include more dollars of interest under the 7-year amortization plan. c. The annual payments would be larger if the interest rate were lower. d. The proportion of each payment that represents interest as opposed to repayment of principal would be higher if the interest rate were lower e. The proportion of each payment that represents interest versus repayment of principal would be higher if the interest rate were higher. I O Icon Key Question 4 of 25 O O