# TOWSON FIN 331 - Questions for Extra Credit Points. (7 pages)

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## Questions for Extra Credit Points.

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Problems/Exams

- Pages:
- 7
- School:
- Towson University
- Course:
- Fin 331 - Principles Of Financial Management

**Unformatted text preview: **

40 Questions for Extra Credit Points 60 more will come shortly Due 12 7 Monday Please show your work and provide your explanation You need to show your work and explanations Jotting down only the answers is not acceptable If you do all 100 questions you will get up to 3 extra points added to your final total score after I determine your total score based on mid terms HWs and the final Chap 5 1 How long will it take for you to pay off 1 200 charged on your credit card if you plan to make the minimum payment of 10 per month and the credit card charges 24 per annum A 10 years B 35 years C 100 years D 174 years E You may not be able to pay off the debt E PV 1200 PMT 10 i Y 2 n infinite there is no way you can pay of the debt in this case 10 is not enough to catch up the increase in the interest 2 If APR 10 what is the EAR effective annual rate for semi annual compounding A 10 B 10 25 C 12 36 D 13 56 E 15 52 B iear 1 i n n 1 where n is the number of compounding per year 1 0 1 2 2 1 0 1025 10 25 Chap 6 1 If US T Bill has 4 return what is the risk premium of an investment which has 7 required rate of return A 3 B 4 C 5 D 5 5 E 7 A Interest rates Rk Real risk free rate RRF Expected inflation rate IP Risk premium RP considering impact of inflation is same on both T Bill and the investment risk premium is 3 for the investment with a same maturity 2 Which one is not the determinant of market interest rate of a security A Risk free rate B Expected inflation rate C Risk premium D Realized inflation rate E A and B D Interest rates Rk Real risk free rate RRF Expected inflation rate IP Risk premium RP 3 Which one is not the source of the premium A Default risk B Liquidity C Maturity risk premium D Inflation E Nominal interest rate E Interest rates Rk Real risk free rate RRF Expected inflation rate IP Default risk premium DRP Liquidity premium LP Maturity risk premium MRP Nominal interest rate is the outcome of the risk premium sources Chap 7 1 York Inc issued 6 semi annual coupon

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