1 Q02.1
1
Q02.1
You may invest in a project that will return $1,800. If the total holding rate of return is 0.11 (i.e., 11.0%), how much would you have to invest today?
Your Answer:
(enter only numbers [digits, minus, period])
±1
1
2 Q02.2
2
Q02.2
You may purchase a stock for $36. It will pay a dividend of $3. If you sell it for $38 just after collecting the dividend, what is your total rate of return?
Your Answer:
(enter only numbers [digits, minus, period])
2
3 Q02.3
3
Q02.3
You may purchase a stock for $51. It will pay a guaranteed dividend of $1. If you sell it for $55 after collecting the dividend, then what is your (dollar) capital gain (or loss)?
Your Answer:
(enter only numbers [digits, minus, period])
2
4 Q02.4
4
Q02.4
If an asset costs $870 and returns $1,070 in 6 years, then what rate of return per year does it offer?
Your Answer:
(enter only numbers [digits, minus, period])
3
5 Q02.5
5
Q02.5
If you buy a Certificate of Deposit (CD) with $1,000 today, offering a true annual holding rate of return of 4.5%, how much will you have in 17 years?
Your Answer:
(enter only numbers [digits, minus, period])
±0.5
3
6 Q02.6
6
Q02.6
If you buy a CD with $8,000 today, offering a guaranteed 0.06 (=6.0%) quoted annual interest rate, compounded monthly, how much money will you have in 17 years?
Your Answer:
(enter only numbers [digits, minus, period])
±0.5
4
7 Q02.7
7
Q02.7
If a bank savings account with $5,000 will be worth $7,000 in 16 years, and if the interest rate is constant, what is the interest rate quote that the bank would post in its window? (Assume 365 days/year.)
Your Answer:
(enter only numbers [digits, minus, period])
4
8 Q02.8
8
Q02.8
You opened a CD account 10 years ago, and the account now has a balance of $12,000. You only made one deposit on the day you opened the account, and never withdrew or deposited again. What was the amount of the original deposit if you collected a constant 8.0% quoted annual rate, compounded monthly?
Your Answer:
(enter only numbers [digits, minus, period])
±0.5
3
9 Q02.9
9
Q02.9
A savings account quotes an effective interest rate of 0.11 (i.e., effective APY = 11.0%) per year. How many basis points would you earn per week on a balance in this account? (Assume 52.15 weeks per year.)
Your Answer:
(enter only numbers [digits, minus, period])
±0.1
3
10 Q02.10
10
Q02.10
For a $100,000 deposit, a bank offers two choices:
- Account A pays interest at a true annual holding rate of return of 5% each year, i.e., compounding annually.
- Account B pays a simple non-compounding annual interest rate of 5% per year (for a total interest rate of 25.0%), but pays a one-time bonus of $5,000 at the end of 5 years.
What is the final value of account A minus the final value of account B?
Your Answer:
(enter only numbers [digits, minus, period])
±1
2