Fin 3000 - version 4 2B. The folow'ing is known about the four savings accounts offered by competing Which of these deals is the best? A. APR B. APR C. EAR D. EAR E. (A) and (C) banks 10% 10% 10% 10% interest is compounded annually interest is compounded quarterly interest is compounded quarterly interest is compounded annually How much would you have to invest today at 9% compounded annually to have $25,000 available for a purchase of a car four years from now? A. $17,342 B. $18,267 C. $17,711 D. $18,157 E. none of the above 29, A portfolio has 50% of its funds invested in stock A and 50% of its funds invested in stock B. Stock A's variance is 25. Stock B's variance is 121. The correlation between A and B is 0.5. How much is the portfolio variance? A. 63 B. 68 C. 87 D. 50 E. none of the above 30, 31. $1,000 par value bonds of Castles in the Sand, Inc. pay $80 in annual coupons. The bonds are trading at their face value, what happens to the bond if market interest rates suddenly change to 6%? A. the current yield changes to 12% B. the coupon rate changes to 12% C. the price of the bond goes down D. the price of the bond goes up E. the information given is not sufficient to answer the question About how many years will it take to triple your money with an interest rate of 13% per year? A. B. C. D. E. 32 7 years 8 years 6 years 9 years none of the above Consider a stock with expected return of 12%. Treasury bills currently yield 3%. The expected return on the market portfolio is 7%, what is the risk premium on this stock? A, 5% B, 8% C.9% D.796 33. E none of the above