BUS 401 Week 2 Quiz Version b

In this paperwork of BUS 401 Week 2 Quiz Version b you will find the answers on the next questions:

1. Beta is a statistical measure of (Points : 1)

2. At what rate must $500 be compounded annually for it to grow to $1,079.46 in 10 years? (Points : 1)

3. How much money must you pay into an account at the end of each of 20 years in order to have $100,000 at the end of the 20th year? Assume that the account pays 6% per year, and round to the nearest $1. (Points :1)

4. Halverson, Inc. just issued $1,000 par 20-year bonds. The bonds sold for $936 and pay interest semi-annually. Investors require a rate of 7.00% on the bonds. What is the amount of the semi-annual interest payment on the bonds? (Points : 1)

5. What is the present value of $15,500 to be received 12 years from today? Assume a discount rate of 7.5% compounded annually and round to the nearest $1. (Points : 1)

6. Finance theory suggests that the current market value of a bond is based upon which of the following? (Points : 1)

7. A typical measure for the risk-free rate of return is the (Points : 1)

8. A financial advisor tells you that you can make your child a millionaire if you just start saving early. You decide to put an equal amount each year into an investment account that earns 7.5% interest per year, starting on the day your child is born. How much would you need to invest each year (rounded to the nearest dollar) to accumulate a million for your child by the time he is 35 years old? (Your last deposit will be made on his 34th birthday.) (Points : 1)

9. You decide you want your child to be a millionaire. You have a son today and you deposit $15,000 in an investment account that earns 9% per year. The money in the account will be distributed to your son whenever the total reaches $1,000,000. How old will your son be when he gets the money (rounded to the nearest year)? (Points : 1)

10. How much money must you pay into an account at the end of each of 20 years in order to have $100,000 at the end of the 20th year? Assume that the account pays 6% per year, and round to the nearest $1. (Points : 1)

11. Preferred stock is similar to a bond in the following way (Points : 1)

12. A financial advisor tells you that you can make your child a millionaire if you just start saving early. You decide to put an equal amount each year into an investment account that earns 7.5% interest per year, starting on the day your child is born. How much would you need to invest each year (rounded to the nearest dollar) to accumulate a million for your child by the time he is 35 years old? (Your last deposit will be made on his 34th birthday.) (Points : 1)

13. The present value of $1,000 to be received in 5 years is ________ if the discount rate is 7.8%. (Points : 1)

14. A typical measure for the risk-free rate of return is the (Points : 1)

15. The capital asset pricing model (Points : 1)

16. Assume that Brady Corp. has an issue of 18-year $1,000 par value bonds that pay 7% interest, annually. Further assume that today's required rate of return on these bonds is 5%. How much would these bonds sell for today? Round off to the nearest $1.

17. What is the value of a bond that matures in 5 years, has an annual coupon payment of $110, and a par value of $2,000? Assume a required rate of return of 7%. (Points : 1)

18. A corporate bond has a coupon rate of 12%, a yield to maturity of 10.55%, a face value of $1,000, and a market price of $850. Therefore, the annual interest payment is (Points : 1)