You plan to invest in bonds that pay 6.0%

You plan to invest in bonds that pay 6.0%

Subject: Business    / Finance   
Question
1.You plan to invest in bonds that pay 6.0%, compounded annually. If you invest $10,000 today, how many years will it take for your investment to grow to $30,000? (Points : 2)
12.37
13.74
15.27
18.85

Question 2.2.You plan to invest in securities that pay 8.0%, compounded annually. If you invest $5,000 today, how many years will it take for your investment to grow to $9,140.20? (Points : 2)
5.14
5.71
6.35
7.84

Question 3.3.Chuck has $2,500 invested in a bank that pays 4% annually. How long will it take for his funds to double? (Points : 2)
14.39
15.15
15.95
17.67

Question 4.4.Jose now has $500. How much would he have after 6 years if he leaves it invested at 5.5% with annual compounding? (Points : 2)
$591.09
$622.20
$654.95
$689.42

Question 5.5.Ellen now has $125. How much would she have after 8 years if she leaves it invested at 8.5% with annual compounding? (Points : 2)
$205.83
$216.67
$228.07
$240.08
$252.08

Question 6.6.Suppose a State of California bond will pay $1,000 eight years from now. If the going interest rate on these 8-year bonds is 5.5%, how much is the bond worth today? (Points : 2)
$651.60
$684.18
$718.39
$754.31

Question 7.7.Which of the following statements regarding a 15-year (180-month) $125,000, fixed-rate mortgage is CORRECT? (Ignore taxes and transactions costs.) (Points : 2)
The remaining balance after three years will be $125,000 less one third of the interest paid during the first three years.
Because it is a fixed-rate mortgage, the monthly loan payments (which include both interest and principal payments) are constant.
Interest payments on the mortgage will increase steadily over time, but the total amount of each payment will remain constant.
The proportion of the monthly payment that goes towards repayment of principal will be lower 10 years from now than it will be the first year.
The outstanding balance declines at a slower rate in the later years of the loan’s life.

Question 8.8.Cheers Inc. operates as a partnership. Now the partners have decided to convert the business into a regular corporation. Which of the following statements is CORRECT? (Points : 2)
Assuming Cheers is profitable; less of its income will be subject to federal income taxes.
Cheers will now be subject to fewer regulations.
Cheers’ shareholders (the ex-partners) will now be exposed to less liability.
Cheers’ investors will be exposed to less liability, but they will find it more difficult to transfer their ownership.

Question 9.9.The disadvantages associated with a proprietorship are similar to those under a partnership. One exception relates to the more formal nature of the partnership agreement and the commitment of all partners' personal assets. As a result, partnerships do not have difficulty raising large amounts of capital. (Points : 2)
True
False

Question 10.10.Which of the following statements is CORRECT? (Points : 2)
A time line is not meaningful unless all cash flows occur annually.
Time lines are not useful for visualizing complex problems prior to doing actual calculations.
Time lines cannot be constructed to deal with situations where some of the cash flows occur annually but others occur quarterly.
Time lines can be constructed where some of the payments constitute an annuity but others are unequal and thus are not part of the annuity.