Question 34

Suppose the U.S. Treasury offers to sell you a bond for $767.25. No payments will be made until the bond matures 5 years from now, at which time it will be redeemed for $1,000. What interest rate would you earn if you bought this bond at the offer price?

Group of answer choices

6.42%

5.99%

5.33%

5.44%

Question 35

What is the PV of an annuity due with 5 payments of $7,300 at an interest rate of 5.5%?

Group of answer choices

$32,887.60

$32,229.84

$31,572.09

$30,585.46

Question 36

Tom Noel holds the following portfolio:

Stock		Investment		Beta
A		$150,000		1.40
B		$50,000		0.80
C		$100,000		1.00
D		$75,000		1.20
Total		$375,000

Tom plans to sell Stock A and replace it with Stock E, which has a beta of 0.80. By how much will the portfolio beta change? Do not round your intermediate calculations

Group of answer choices

0.271

0.194

0.290

0.240