You borrowed a certain amount from a bank that offered you two eptions to pay the loan off

I$)$ A lump sum of $80,000$SAR at the end of four years;

II$)$ Equal annual payments at the end of each of the next four years.

If the interest rate on the loan is $6\mathrm{.}1\%,$ what annual payments should be required in the second option so that both forms of payment are equivalent?

A$)19,520$SAR.

B$)18,287$SAR.

C$)15,782$ SAR.

D$)18,260$SAR.

indicates the amount of interest without the effect of compounding that is the amount of simple interest earned in one year.

A$)$ The effective annual rate

B$)$ The annual percentage rate

C$)$ The coupon rate

D$)$ The interest rate risk

A bond is currently trading below par value. Which of the following may be TRUE about the bond? $1.$ The bond's yield to maturity is less than its coupon rate.

II$.$ The bond is a zero$-$coupon bond.

III. The bond's yield to maturity is greater than its coupon rate.

A$)1.$

B$)$ III.

C$)$ I and III.

D$)$ II and III.

An investment pays you $30,000$ SAR at the end of this year and $15,000$ SAR at the end of each of the following four years. What is the present value $($PV$)$ of this investment at the interest rate of $4\mathrm{.}5\%$ per year?

A$)80,204$ SAR.

B$)90,000$SAR.

C$)79,228$SAR.

D$)82,521$SAR.

Which of the following is a diversifiable risk?

A$)$ The risk that the central bank will increase the interest rate.

B$)$ The risk that oil prices will rise, increasing production costs.

C$)$ The risk of a key employee being hired away by a competitor.

D$)$ The risk that the economy slows, reducing demand for your firm's products.

Assume you just bought a new home and took a $30-$year home mortgage. Assuming the loan's amount is $500,000$ SAR with a $6\%$ APR that is compounded monthly, what is the monthly loan payment?

A$)2,998$SAR.

B$)3,677$SAR.

C$)3,526$SAR.

D$)2,414$ SAR.

ABC stock prices gave a realized retum of $10\%,20\%,-20\%,$ and $-10\%$ over four successive quarters. What is the annual realized retum for ABC for the year?

A$)-3\mathrm{.}45\%$

B$)-4\mathrm{.}96\%$

C$)*5\mathrm{.}12\%$

D$)6\mathrm{.}54\%$

Saud deposits $6,500$ SAR today in a saving account at AI$-$Bilad Bank that offers an interest of $4\mathrm{.}6\%$ on such accounts. What is the value of the money in his saving account after two years?

A$)5,94$I SAR.

B$)6,799$SAR.

C$)7,112$ SAR.

D$)12,155$ SAR.

Bupa Arabia for Cooperative Insurance Co$.$ is expected to pay an annual dividend of $1\mathrm{.}20$SAR per share in a year, and it is expected that these dividend payments will grow by $5\mathrm{.}1\%$ per year forever. If Bupa's equity cost of capital is $11\mathrm{.}4\%,$ then the current value of a share of Bupa's stock is

A$)19\mathrm{.}05$ SAR

B$)23\mathrm{.}53$SAR

C$)13\mathrm{.}63$ SAR

D$)10\mathrm{.}53$SAR

Maha is calculating the present value of a bonus she will receive next year. In finance, the process she is using is called

A$)$ accumulating

B$)$ compounding

C$)$ growth analysis

D$)$ discounting

If the current inflation rate is $2\mathrm{.}5\%,$ then the nominal rate necessary for you to earn $8\mathrm{.}1\%$ real interest rate on your investment i:

A$)5\mathrm{.}46\%.$

B$)2\mathrm{.}50\%.$

C$)10\mathrm{.}80\%.$

D$)8\mathrm{.}10\%.$

represents the portion of an asset's risk that can be eliminated by combining it with assets with less than perfectly positive correlation.

A$)$ Unsystematic risk

B$)$ Systematic risk

C$)$ Non$-$diversifiable risk

D$)$ Market risk

How long will it take for $50,000$ SAR to be placed in a savings account at $10\%$ interest to grow into $75,000$ SAR?

A$)5\mathrm{.}25$ years.

B$)6\mathrm{.}25$ years.

C$)4\mathrm{.}25$ years.

D$)3\mathrm{.}25$ years.

The average annual retum over the period $1926-2009$ for the $S$&$P500$ is $12\%,$ and the standard deviation of retums is $21\mathrm{.}3\%.$ Based on these numbers, what is a $95\%$ prediction interval for $2010$ retums?

A$)*1\mathrm{.}5\%,21\mathrm{.}8\%.$

B$)-10\mathrm{.}7\%,32\mathrm{.}8\%.$

C$)-30\mathrm{.}6\%,54\mathrm{.}6\%.$

D$)-30\mathrm{.}6\%,76\mathrm{.}4\%.$

All other things being equal, which of the following may result in lower dividends?

A