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FIN534 Midterm exam 2 | answered 2025

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1. Which of the following statements is CORRECT, assuming positive interest rates and holding other things constant? A $250,000 loan is to be amortized over 8 years, with annual end-of-year payments.... Which of these statements is CORRECT? 3. Which of the following statements is CORRECT, assuming positive interest rates and holding other things constant? 4. Which of the following statements regarding a 20-year (240-month) $225,000, fixed-rate mortgage is CORRECT? (Ignore taxes and transactions costs.) 5. Your bank account pays an 8% nominal rate of interest. The interest is compounded quarterly. Which of the following statements is CORRECT? 6. Of the following investments, which would have the lowest present value? Assume that the effective annual rate for all investments is the same and is greater than zero. 7. Which of the following statements is NOT CORRECT? 8. A 10-year bond with a 9% annual coupon has a yield to maturity of 8%. Which of the following statements is CORRECT? 9. A Treasury bond has an 8% annual coupon and a 7.5% yield to maturity. Which of the following statements is CORRECT? 10. Which of the following statements is CORRECT? 11. Which of the following statements is CORRECT? 12. Which of the following statements is CORRECT? 13. A 10-year corporate bond has an annual coupon of 9%. The bond is currently selling at par ($1,000). Which of the following statements is NOT CORRECT? 14. Which of the following is most likely to occur as you add randomly selected stocks to your portfolio, which currently consists of 3 average stocks? 15. Which of the following statements is CORRECT? 16. Assume that the risk-free rate remains constant, but the market risk premium declines. Which of the following is most likely to occur? 17. Assume that the risk-free rate is 5%. Which of the following statements is CORRECT? 18. Which of the following statements is CORRECT? 19. Which of the following statements is CORRECT? 20. A stock just paid a dividend of D0 = $1.50. The required rate of return is rs = 10.1%, and the constant growth rate is g = 4.0%. What is the current stock price? 21. Stock X has the following data. Assuming the stock market is efficient and the stock is in equilibrium, which of the following statements is CORRECT? 22. A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return is rs = 10.5%, and the expected constant growth rate is g = 6.4%. What is the stock's current price? 23. You, in analyzing a stock, find that its expected return exceeds its required return. This suggests that you think 24. Which of the following statements is CORRECT? 25. Which of the following statements is CORRECT? [Show More]

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