QUESTION 11

1. Generally, the change in the risk aversion level of investors is likely to affect the required rate of return on a stock. The increase in in the risk aversion level will likely have a positive impact on the stock's price.

True

False

QUESTION 13

Yields on longer term bonds usually are greater than on shorter term bonds, so the maturity risk premium is more affected by interest rate risk than by reinvestment rate risk.

True

False

QUESTION 17

1. Which of the following statements is correct?

		Special common dividends paid are tax deductible.
		Interest expense is tax deductible.
		Regular common dividends paid are tax deductible.
		Stock dividends and stock splits should pay tax.

QUESTION 48

1. Construct an amortization schedule for a $1,500, 6% annual rate loan with 3 equal payments. The first payment will be made at the end of the 1^st year. Find the required annual payment.

		$355.2
		$467.3
		$388.0
		$561.2

5 points

QUESTION 49

1. Based on the information from Question 48, whats the ending balance of the amortized loan at the end of the 2^nd year.

		$0
		$529.4
		$388.3
		$561.2

5 points

QUESTION 50

1. Based on the information from Question 48 and 49, calculate the total amount of interests you should pay for the amortized loan in three years.

		$168.3
		$175.8
		$183.5
		$164.1