1.) A 10 year semiannual is selling at par and has a yield to maturity of 7.50 percent. What is the amount of each coupon payment if the face value of the bonds is $1,000? DO NOT USE DOLLAR SIGNS OR COMMAS IN YOUR ANSWER. ROUND ANSWER TO THE NEAREST CENT (2 Decimals). LIST THE NUMBER AS A POSITIVE NUMBER.

2.)A company offers 5.77 percent coupon bonds with semiannual payments and a yield to maturity of 6.49 percent. The bonds mature in 12 years. What is the market price per bond if the face value is $1,000? DO NOT USE DOLLAR SIGNS OR COMMAS IN YOUR ANSWER. ROUND ANSWER TO THE NEAREST CENT (2 Decimals). LIST THE NUMBER AS A POSITIVE NUMBER.

3.)

A $1,000 par value bond sells for $1,020. It matures in 5 years and has an 5% coupon, paid semiannually. What is the bond’s yield to maturity (YTM)? ENTER YOUR ANSWER AS A PERCENTAGE WITH ONE DECIMAL PLACE (e.g., 12.1) AND NOT AS A DECIMAL (e.g., 0.121). ROUND TO THE NEAREST TENTH OF A PERCENT. DO NOT USE THE PERCENT SIGN (%) IN YOUR ANSWER.

A new furnace for your small factory will cost $46,000 and a year to install, will require ongoing maintenance expenditures of $4,000 a year. But it is far more fuel-efficient than your old furnace and will reduce your consumption of heating oil by 4,300 gallons per year. Heating oil this year will cost $3 a gallon; the price per gallon is expected to increase by $0.50 a year for the next 3 years and then to stabilize for the foreseeable future. The furnace will last for 20 years, at which point it will need to be replaced and will have no salvage value. The discount rate is 10%.

a. What is the net present value of the investment in the furnace? (Do not round intermediate calculations. Round your answer to the nearest whole dollar.)

b. What is the IRR? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

c. What is the payback period? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

d. What is the equivalent annual cost of the furnace? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

e. What is the equivalent annual savings derived from the furnace? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

f. Compare the PV of the difference between the equivalent annual cost and savings to your answer to part (a). Are the two measures the same or is one larger?

The dividend on a company's stock will be $3.25 in one year, $4.25 in two years and $5.25 in three years. In three years, you can sell the stock for $42.50. If you require a 9.75% rate of return on your investment, how much are you willing to pay for a share of this stock?

At the begining of the year, Ollie's outside in the Bow Out partnership was 35,000. During the tax year, he contributed property (FMV: $20,000; Basis: 6,000) subject to a recourse debt of $12,000. His 1/3 share of the partnership's ordinary income and separately stated income and deduction items was $30,000. At the end of the year, the partnership distributed $15,000 of cash to him and borrowed $36,000 of nonrecourse debt. What is Ollie's ending outside Basis?
A) 42,000
B) 56,000
C) 62,000
D) 64,000
E) 76,000

The price of a zero-coupon bond with maturity 1 year is $943.40. The price of a zero-coupon bond with maturity 2 years is $898.47. For this problem, express all yields as net (not gross) rates. Assume the face values of the bonds are $1000.

1.What is the yield to maturity of the 1 year bond?

2.What is the yield to maturity of the 2 years bond?

3.Assuming that the expectations hypothesis is valid, what is the expected short rate in the first year?

4.Assuming that the expectations hypothesis is valid, what is the expected short rate in the second year ?

5.Assuming the liquidity preference theory is valid and the liquidity premium in the second year is 0.01, what is the expected short rate in the second year?

6.Assuming that the expectations hypothesis is valid, what is the expected price of the 2 year bond at the beginning of the second year?

7.What is the rate of return that you expect to earn if you buy the 2 year bond at the beginning of the first year and sell it at the beginning of the second year?

In a survey of 2088 adults in a recent​ year, 1440 say they have made a New​ Year's resolution.

Construct​ 90% and​ 95% confidence intervals for the population proportion. Interpret the results and compare the widths of the confidence intervals.

Compare the widths of the confidence intervals. Choose the correct answer below.

4. (a) What is the future value of a 4-year ordinary (regular) annuity of $2,750 if the appropriate interest rate is 5.6%?

(b) What is the present value of this 4-year ordinary annuity?

(c) What would the i) future, and ii) present value, be if this annuity were an annuity due (still 4 years)? Hint: set your calculator to BGN, there is a video in M2 that shows you how to do this. Don’t forget to reset to “END” after you work an annuity due problem.

FV =

PV =

5. Compare the results you got in part b for present and future value of a "regular" annuity and compare these to the values you got for the annuity due (part c). What is the relationship that you see? Using the time value of money concepts you have learned so far, why does this relationship (PV of regular annuity vs. annuity due and FV of regular annuity vs. annuity due occur? (4 points)

6. What is the present value of the following uneven cash flow stream? The appropriate interest rate is 5.6%, compounded annually. Note that the final cash flow represents a project where there may be reclamation or other “end of project” costs which are greater than any final income and/or salvage value.

7. What annual interest rate will cause $2,750 to grow to $4,200 in 5 years, assuming annual compounding? Show your answer to 2 decimals (x.xx%)

8. Will the future value be larger or smaller if we compound an initial amount more often than annually—for example, every 6 months, or semiannually — holding the stated interest rate constant? Explain your answer.

9. a) What is the future value of $2,750 after six years under 5.6% semiannual compounding

9b) What is the effective annual rate for 5.6% interest with semiannual compounding? Be sure to show your EAR answer to 2 decimals, that is xx.xx%

9c) What is the future value of $2,750 after six years under 5.6% quarterly compounding?

9d) What is the effective annual rate (EAR) for 5.6% interest with quarterly compounding?

9e) Explain how the effective annual rate changes based on the number of compounding periods per year.

9f) What is the future value of $2,750 after six years under 5.6% daily compounding? Assume 365 day years and do not do any interim rounding.

9g) What is the effective annual rate for 5.6% (APR) interest with daily compounding?

10. Will the effective annual rate ever be equal to the simple (quoted) rate? Explain.

11. (a) Assume that you have borrowed $15,000 for 3 years and you have an annual interest rate of 5.6% (annual percentage rate or APR). What is the monthly payment due on the loan?

(b) Switch gears here and now assume that the payments are made annually. What is the annual interest expense for the borrower (this is also the annual interest income for the lender) during Year 1? (Hint: Go to the TVM lecture notes for multiple cash flows and go to slide 15.)

12. You are about to buy a home; the purchase price of the car is $200,000 and you are paying 10% of that amount as a down payment and financing the remainder. Your mortgage loan terms are 30 years of monthly payments at an annual rate of 3.25%.

1. How much are your monthly mortgage payments?

2. Over the life of the loan, how much did you pay in interest?

13. a) Suppose on January 1 you deposit $2,750 in an account that pays a quoted interest rate of 2.35% (APR), with interest added (compounded) daily. How much will you have in your account on October 1, or after 9 months? (assume N = 273 days) Recall that the interest rate (I/Y) represents the periodic rate based on how many times per YEAR the interest is compounded. Hint, this is 365 times per year. As above, and all TVM type problems, there should be no interim rounding of the interest rates.

b) Now suppose you leave your money in the bank for 21 months. Thus, on January 1 you deposit $2,750 in an account that pays an APR of 2.35% compounded daily. How much will be in your account on October 1 of the following year? (assume N = 638 days)

Which of the following statements is most correct with regards to a 10 year bond with a 9% annual coupon rate and a YTM of 8%? a) The bond is selling at a discount. b) The bond’s current yield is greater than 9 percent. c) If the yield to maturity remains constant, the bond’s price one year from now will be lower than its current price.

A new furnace for your small factory will cost $43,000 and a year to install, will require ongoing maintenance expenditures of $4,000 a year. But it is far more fuel-efficient than your old furnace and will reduce your consumption of heating oil by 4,000 gallons per year. Heating oil this year will cost $3 a gallon; the price per gallon is expected to increase by $0.50 a year for the next 3 years and then to stabilize for the foreseeable future. The furnace will last for 20 years, at which point it will need to be replaced and will have no salvage value. The discount rate is 8%

a. What is the net present value of the investment in the furnace? (Do not round intermediate calculations. Round your answer to the nearest whole dollar.)

b. What is the IRR? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

c. What is the payback period? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

d. What is the equivalent annual cost of the furnace? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

e. What is the equivalent annual savings derived from the furnace? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

f. Compare the PV of the difference between the equivalent annual cost and savings to your answer to part (a). Are the two measures the same or is one larger?

a.NPV_________

b.IRR ____________%

c.Cumulative cash flows are positive in_______

d.Equivalent annual cost____________

e.Equivalent annual savings_____________

f.Are the two measures the same or is one larger?_______________

According to the​ research, 43 ​% of homes sold in a certain month and year were purchased by​ first-time buyers. A random sample of 185 people who just purchased homes is selected. Complete parts a through e below. a. Calculate the standard error of the proportion. =0.0364 ​(Round to four decimal places as​ needed.)

What is the probability that more than 78 of them are​ first-time buyers? ​P(More than 78 of them are​ first-time ​buyers)______ ​(Round to four decimal places as​ needed.)