Kim Lee is analyzing two projects. The first requires a $1125 initial investment and returns $600 a year for ever. The second project requires a $2534 initial investment and returns $700 a year for ever. What is the crossover point for these two projects?

Select one: a. 3.95% b. The crossover point cannot be computed based on the information provided. c. 8.89% d. 7.10% e. 25.71%

When you were born, your dear old Aunt Minnie promised to deposit $1962 into a savings account bearing a 11% compounded annual rate (EAR) on each birthday, beginning with your first. You have just turned 26 and want the dough. However, it turns out that dear old (forgetful) Aunt Minnie made no deposits on your 6th and 13th birthdays. How much is in the account right now?

Select one:

a. $223772.34

b. $6757169.65

c. $227696.34

d. $191960.20

e. $230018.95

4 years from now you will receive the first of 11 annual $12112 payments. The current interest rate is 3% EAR, but by the beginning of year 4, the rate will rise to 11% EAR. What is the present value of this cash flow stream?

Select one:

a. $68794.23

b. $27146.30

c. $110109.09

d. $97830.50

e. $66790.52

A portfolio has an expected return of 17.84%. The portfolio is comprised of 82% stock A and 18% stock B. The risk-free rate of return is 3.31% and the market risk premium is 7.85%. The beta of stock B is 0.97. What is the beta of stock A?

Select one:

a. 2.04

b. 0.97

c. 2.56

d. 3.69

e. 12.35