QUESTION 25

1. S uppose that a person wants to purchase anu annuity today that would pay $20,000 after taxes per year

   until the end of that persons life. The insurance company expects the person to live 25 more years and can invest the amount received for the annuity at a guaranteed interest rate of 5 percent. The fair price of an annuity policy is ( ).

   		$211,426.5
   		$281,878.89
   		$30,258.11
   		$432,254.78
   		$575,321
   		$986,222
   		$1,038,245.88

1 points

QUESTION 26

1. Suppose an investor buys 10 shares of stock priced at $55.10 and sells the stock one year later for $56.30 after collecting a $0.30 dividend per share. If dividend income is taxed at a 27% rate and capital gains are taxed at 22%, what was the investors after-tax holding period return in%? a. 1.2 b. 2.1 c. 3.3 d 4.2 e. 5.7 f. 6.4 g. 7 h. 8 i

   		a
   		b
   		c
   		d
   		e
   		f
   		g

1 points

QUESTION 27

1. The risk incurred by an FI as the result of activities related to contingent assets and liabilities

   1. Sovereign risk
   2. Off balance sheet risk
   3. Technology risk
   4. Credit risk
   5. Insolvency risk

   		a
   		b
   		c
   		d
   		e

1 points

QUESTION 28

1. The risk that repayments from foreign borrowers may be interrupted because of interference from foreign governments

   1. Insolvency risk
   2. Credit risk
   3. Liquidity risk
   4. Operational risk
   5. Sovereign risk

   		a
   		b
   		c
   		d
   		e

1 points

QUESTION 29

1. The schedule showing how monthly mortgage payments are split into principal and interest is called a(n)

   a. securitization schedule b. balloon payment schedule. c. graduated payment schedule. d. amortization schedule. e. growing equity schedule.

   		a
   		b
   		c
   		d
   		e

1 points

QUESTION 30

1. Which is a secondary market for equities?

   a. IPO b. SEO c. NYSE d. Money markets e. shelf registration

   		a
   		b
   		c
   		d
   		e

1 points

QUESTION 31

1. Which one of the followings is true?

   a. NYSE is an OTC market b. NASDAQ required lager capital for a firm to list than NYSE does.

   c. NASDAQ is a quotation system. d. ADRs are index funds that are listed on an exchange and can be traded intraday and shorted

   e. ETFs are a de-tour to purchase foreign equities.

   		a
   		b
   		c
   		d
   		e

1 points

QUESTION 32

1. You buy a stock for $30 per share and sell it for $33 after holding it for slightly over a year and collecting a $0.75 per share dividend. Your ordinary income tax rate is 28 percent and your capital gains tax rate is 20 percent. Your after-tax rate of return is

   		7.1%
   		8.5%
   		9.8%
   		10.33%
   		11%

1 points

QUESTION 33

1. a. Conventional Mortgage b. Fixed Rate Mortgage c. Amortized Mortgage d. Balloon Mortgage e. ARM ) applies floating (or partially floating ) rate mortgage.

   		a
   		b
   		c
   		d
   		e