This course is Financial Management from BYU University.

Questions are attached and there are total 10 questions that you need to answer.

If you don't know the answer, just state you don't know and DO NOT GUESS The ANSWER.

Thank you in advance for your help

Topic 5 The Time value of Money: Compounding and Discounting 4. Today, a round-trip plane ticket from Los Angeles to New York costs $350. If the average annual inflation rate is 2.5%, who much will the ticket cost 30 years from now? $612.50 $734.15 $763.81 $658.24 Solution: [HTML]

PV	FV	PMT	N	I	Mode
-	$800,579	(400.00)	40x12=480	6/12=0.50%	Begin

Note: As with calculator keystrokes, you can interpret the black variables as known inputs and the highlighted variable as the solution. Red variables indicate a negative value.[/HTML] Score: 0 of 1 5. You want $15,000 fifteen years from now. If you can earn 8% per year in your savings account, how much do you have to deposit in today? $5,261 $4,729 $7,128 $6,818 Solution: [HTML]

PV	FV	PMT	N	I
($4,728.63)	$15,000.00	-	15	8.00%

7. How does a perpetuity differ from an ordinary annuity? A perpetuity is another name for an annuity due. A perpetuity is another name for an ordinary annuity. A perpetuity has only a limited numbers of cash flows while an ordinary annuity has payments that continue forever. A perpetuity has payments that go on forever while an ordinary annuity has a limited numbers of cash flows. Score: 0 of 1 8. You bought a new car today which cost you $20,000. You financed the entire cost with a 5-year loan at 4.00%. If you make payments at the end of each month starting a month from now, how much is your monthly payment? $374.38 $368.33 $884.04 $850.04 Solution: Note: use 4 decimal places of accuracy for the interest rate. [HTML]

PV	FV	PMT	N	I
$20, 000.00	$0.00	$ (368.33)	N	4/12 = 0.3333%

Note: as with calculator keystrokes, you can interpret the black variables as known inputs and the highlighted variable as the solution. Red variables indicate a negative value.[/HTML] Score: 0 of 1 10. You are planning to retire 40 years from now. If your retirement account pays an annual rate of 6% compounded monthly and you start making a monthly contribution of $400 a month today, how much will you have when you retire in 40 years? $787,429 $800,579 $796,596 $742,857 Solution: Since you started today, you have to use the begin mode to calculate the future value. Note: as with calculator keystrokes, you can interpret the black variables as known inputs and the highlighted variable as the solution. Red variables indicate a negative value. [HTML]

PV	FV	PMT	N	I	Mode
-	$800,579	(400.00)	40x12=480	6/12=0.50%	Begin

[/HTML] Score: 0 of 1 Topic 6 Bond Valuation: Fixed Income Analysis 5. What is the price of a bond with a $1,000 face value, a coupon rate of 13% paid annually, and matures in 25 years? Your required rate of return is 7.5%. $1,316.80 $1,198.32 $1,459.75 $1,255.21 $1,613.08 N = 25 I = 7.5% PMT = $1,000 13% = $130 FV = $1,000[/HTML] Score: 0 of 1 8. What is the value of a bond? the coupon payments of the bond the present value of its cash flows the face value of the bond plus coupon payments the future value of its cash flows the face value of the bond Score: 0 of 1 Topic 11 Risk and Return: The Key Trade-Of 4. (Built-up method) Assume a required rate of return of 23%, an equity risk premium of 8%, microcap premium of 5%, and a start-up risk premium of 6%. Use the build-up method to calculate the bond yield. 42% 13% 4% 12%

Required Rate of Return	23%
- Equity risk premium	8%
- Micro-cap risk premium	5%
- Start-up risk premium	6%
= Bond Yield	4%

[/HTML] Score: 0 of 1 7. If a security's standard deviation is high this indicates all but the following: a higher volatility in the security's expected return a greater likelihood of obtaining expected returns a greater uncertainty of the security's return a greater total risk of the security Score: 0 of 1 8. Firm A and Firm B are perfectly negatively correlated. If your portfolio contains an equal dollar amount of stock in firms A and B, what will be the risk of the portfolio? It will be riskless. Firm B's stock will influence it more because its variance is greater. Firm A will influence it more because its variance is greater. Firm A's stock will influence it more because its standard deviation is greater. If two assets are perfectly negatively correlated, then we can eliminate all risk. Score: 0 of 1