8 Finance mcqs
1. Ellen now has $125. How much would she have
after 8 years if she leaves it invested at 8.5% with annual compounding?
A)
$205.83
B)
$216.67
C)
$228.07
D)
$240.08
E)
$252.08
2. Last year Rocco Corporation's sales were
$225 million. If sales grow at 6% per year, how large (in millions) will they
be 5 years later?
A)
$271.74
B)
$286.05
C) $301.10
D)
$316.16
E)
$331.96
3.
How much would $1, growing at 3.5% per year, be worth after 75 years?
A)
$12.54
B) $13.20
C)
$13.86
D)
$14.55
E)
$15.28
4. Suppose a State of California bond will pay
$1,000 eight years from now. If the going interest rate on these 8year bonds
is 5.5%, how much is the bond worth today?
A) $651.60
B)
$684.18
C)
$718.39
D)
$754.31
E)
$792.02
5.
Suppose the U.S. Treasury offers to sell you a bond for $747.25. No
payments will be made until the bond matures 5 years from now, at which time it
will be redeemed for $1,000. What interest rate would you earn if you bought
this bond at the offer price?
A) 4.37%
B) 4.86%
C) 5.40%
D) 6.00%
E) 6.60%
6.
The Morrissey Company's bonds mature in 7 years, have a par value of $1,000,
and make an annual coupon payment of $70. The market interest rate for the
bonds is 8.5%. What is the bond's price?
A) $923.22
B) $946.30
C) $969.96
D) $994.21
E) $1,019.06
7. Ezzell Enterprises’ noncallable bonds
currently sell for $1,165. They have a 15year maturity, an annual coupon of
$95, and a par value of $1,000. What is their yield to maturity?
A)
6.20%
B)
6.53%
C)
6.87%
D)
7.24%
E) 7.62%
8.
Garvin Enterprises’ bonds currently sell for $1,150. They have a 6year
maturity, an annual coupon of $85, and a par value of $1,000. What is their
current yield?
A) 7.39%
B)
7.76%
C)
8.15%
D)
8.56%
E)
8.98%
