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6. You want to buy a new car for $480,000, and the car dealership has quoted you an 4.69 APR loan compounded monthly for 48 months to buy the car. What is the EAR on thi loan? A. 4.66% B. 4.68% C. 4.70% D. 4.72% 7. Grand Land Limited offers a 9.5% coupon bond with annual payments. The yield t maturity is 11.2% and the maturity date is 11 years from today. What is the market price o this bond if the face value is $1,000?

6. You want to buy a new car for $480,000, and the car dealership has quoted you an 4.69 APR loan compounded monthly for 48 months to buy the car. What is the EAR on thi loan? A. 4.66% B. 4.68% C. 4.70% D. 4.72% 7. Grand Land Limited offers a 9.5% coupon bond with annual payments. The yield t maturity is 11.2% and the maturity date is 11 years from today. What is the market price o this bond if the face value is $1,000?

Essentials Of Investments
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
Problem 1PS
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6. You want to buy a new car for $480,000, and the car dealership has quoted you an 4.6% APR loan compounded monthly for 48 months to buy the car. What is the EAR on this loan? A. 4.66% B. 4.68% C. 4.70% D. 4.72% 7. Grand Land Limited offers a 9.5% coupon bond with annual payments. The yield to maturity is 11.2% and the maturity date is 11 years from today. What is the market price of this bond if the face value is $1,000? A. $895.43 B. $1,009.67 C. $1,112.20 D. $1,234.18 8. How much are you willing to pay for one share of ABC stock if the company just paid a $0.70 annual dividend, the dividends increase by 1.6% annually, and you require a 10% rate of return? A. $8.29 B. $8.33 C. $8.47 D. $8.53 9. A project has an initial cost of $6,500,000. The cash inflows are $900,000, $2,200,000, $3,600,000, and $4,100,000 over the next four years, respectively. What is the payback period? А. 1.73 years В. 2.51 уears С. 2.94 years D. 3.51 years 10. Suppose a stock had an initial price of $80 per share, paid a dividend of $1.35 per share during the year, and had an ending share price of $87. What was the capital gains yield? A. 7.55% В. 7.69% C. 8.05% D. 8.75% **
Transcribed Image Text:6. You want to buy a new car for $480,000, and the car dealership has quoted you an 4.6% APR loan compounded monthly for 48 months to buy the car. What is the EAR on this loan? A. 4.66% B. 4.68% C. 4.70% D. 4.72% 7. Grand Land Limited offers a 9.5% coupon bond with annual payments. The yield to maturity is 11.2% and the maturity date is 11 years from today. What is the market price of this bond if the face value is $1,000? A. $895.43 B. $1,009.67 C. $1,112.20 D. $1,234.18 8. How much are you willing to pay for one share of ABC stock if the company just paid a $0.70 annual dividend, the dividends increase by 1.6% annually, and you require a 10% rate of return? A. $8.29 B. $8.33 C. $8.47 D. $8.53 9. A project has an initial cost of $6,500,000. The cash inflows are $900,000, $2,200,000, $3,600,000, and $4,100,000 over the next four years, respectively. What is the payback period? А. 1.73 years В. 2.51 уears С. 2.94 years D. 3.51 years 10. Suppose a stock had an initial price of $80 per share, paid a dividend of $1.35 per share during the year, and had an ending share price of $87. What was the capital gains yield? A. 7.55% В. 7.69% C. 8.05% D. 8.75% **
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