Test #1 Name Direction: Choose the best answer. Record your answer on the provided scantron sheet. An annuity can best be described as a. a series of equal payments at fixed intervals for a specified number of periods. b. a series of unequal payments over a specified number of years. c. a series cash flows that start big and gradually shrink over time in each successive period. d. the name of a recently discovered planet in our solar system. The present value of $65,000 to be received 8 years from today, assuming an interest rate of percent is a. $35170.51 b. $47494.86 c. $59607.25 d. $61270.08 2. 3. Financial markets can best be described as a. A system consisting of individuals and institutions, instruments, and procedures that b b. A marketplace where only common stock shares of domestic companies are traded borrowers and savers. A system comprised of individuals and institutions, instruments, and procedures that separate borrowers from savers for public safety and national security reasons. d. Amarketplace where only scoundrels trade financial instruments and a place that serv purpose to society except to satisfy the greed of unethical individuals. 4. The present value of an investment that promises to pay $24000 a year forever, when the inter rate is 6 percent, is S b. 400,000.00 d. 3,400,120.50 a. Minimize the debt used by a firm. 31610.00 483,333.33 5. The primary goal of a publicly-owned firm interested in serving its stockholders should be to b. Maximize expected EPS. Minimize the chances of losses. Maximize the stock price per share. the present value of a 12-year ordinary annuity of $11000 per year. The interest rat d. 6. $19669.24 b. $48303.98 d. $110000.12 Consider the following two questions: "What is the present value of $16000 to be received years, given an interest rate of 11 percent?" The answers to these questions are: b. Different. C. Can't say $87369.55 7. interest rate is 11 percent?" and "How much would I have to invest now in order to receive The same