.A government bond will pay $1,000 three years from now. If the interest rate on 3-year government bonds is 4%, how much is the bond worth today?Select one: A)$991.43 B)$943.46 C)$889.00 D)$907.91

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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1.A government bond will pay $1,000 three years from now. If the interest rate on 3-year government bonds is 4%, how much is the bond worth today?Select one:
A)$991.43
B)$943.46
C)$889.00
D)$907.91

2.A project costs $475 and has cash flows of $100 for the first three years and $RM75 in each of the project’s last five years. What is the payback period of the project?
A) 5.33 years
B)4.75 years
C)5.00 years
D)6.00 years

3.you have $2,000 and plan to purchase a 3-year certificate of deposit (CD) that pays 4% interest, compounded annually. How much will you have when the CD matures?
Select one:
a. $2,324.89
b. $2,249.73
c. $2,011.87
d. $2,591.45

4.DODO Company has common equity of $RM40 million. The company’s stock price is $80 per share and its market/book ratio is 4.0. How many unit of stock does the company have outstanding?
a. 500,000
b. 800,000,000
c. 125,000
d. 2,000,000

5. You want to buy a condo 5 years from now, and you plan to save $3,000 per year, beginning immediately. You will make five deposits in an account that pays 6% interest. Under these assumptions, how much will you have 5 years from today?
a. $15,976.84
b. $17,925.96
c. $17,513.68
d. $16,110.34

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