Question 1

Consider the following two projects with different cash outflow in Year 0 but the same cash inflow (CF) in Year 1 and Year 2.

Year	P	Q
0	-250	-290
1	CF	CF
2	CF	CF

Project _________ will have a higher NPV;

Project _________ will have a higher IRR.

[No calculation is required.]

Group of answer choices

Q; Q

Q; P

P; Q

P; P

Question 2

Consider the following five bonds with different time to maturity, T.

	A	B	C	D	E
T	7.0	6.5	5.0	5.5	6.0

Bond has the highest interest rate risk and Bond and the highest price sensitivity to interest rate movement. Input a CAPITAL letter in each box.

Question 3

Universal Management is expected to pay a dividend of $4 next period, and dividends are expected to grow at 6% per year.

The required return is 16%. How much should the stock be selling for ($)?

Round off your answer to 1 decimal point.

Group of answer choices

44.4

50.0

57.1

33.3

40.0

36.4

Question 4

Suppose you buy some stock at the beginning of the year for $25 per share. At the end of the year, the price is $31. During the year you receive a $9 dividend per share.

If your total investment was $2,200, how much do you have at the end of the year?

Round off your answer to an integer.

Question 5

The current price of ABC bond is $965.

The par value is $1,000.

It has a 8.0% annual coupon rate (with annual coupon payments) and 15 years to maturity. Calculate the bond yield (%)

Group of answer choices

8.42

8.93

7.39

6.37

6.88