Question
QUESTION 45 A lottery winner was given a perpetual payment of $25,362. She could invest the cash flows at 7.5 percent. What is the present
QUESTION 45
A lottery winner was given a perpetual payment of $25,362. She could invest the cash flows at 7.5 percent. What is the present value of this perpetuity? (Round to the nearest dollar.)
| (a) | $338,160 | |
| (b) | $390,215 | |
| (c) | $238,160 | |
| (d) | $201,356 |
QUESTION 46
In a game of chance, the probability of winning a $50 prize is 40 percent and the probability of losing a $50 prize is 60 percent. What is the expected value of the prize in the game?
| (a)($10) | ||
| (b)$0 | ||
| (c)$20 | ||
| (d)$25 |
QUESTION 47
Gwen purchased a stock one year ago for $25, and it is now worth $31. The stock paid a dividend of $1.50 during the year. What was the stock's rate of return from dividend income during the year?
| (a) | 6% | |
| (b) | 15% | |
| (c) | 24% | |
| (d) | 26% |
QUESTION 48
Given the historical information in Chapter 7, which of the following investment classes had the greatest variability in returns?
| (1) | Intermediate-Term Government Bonds | |
| (2) | Long-Term Government Bonds | |
| (3) | Large U.S. Stocks | |
| (4) | Small U.S. Stocks |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started