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A credit union will loan you $25,000 for three years to buy a boat. The loan must be repaid in 78 equal fortnightly payments. The annual interest rate on the loan is 7%. What is the amount of the fortnightly payments? A. $1,758.98 B. $358.82 C. $355.77 1. D. $288.47

A credit union will loan you $25,000 for three years to buy a boat. The loan must be repaid in 78 equal fortnightly payments. The annual interest rate on the loan is 7%. What is the amount of the fortnightly payments? A. $1,758.98 B. $358.82 C. $355.77 1. D. $288.47

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
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1. A credit union will loan you $25,000 for three years to buy a boat. The loan must be repaid in 78 equal fortnightly payments. The annual interest rate on the loan is 7%. What is the amount of the fortnightly payments? A. $1,758.98 B. $358.82 C. $355.77 D. $288.47 Shares in Softec Ltd. is currently selling for $42.86. It is expected to pay a dividend of $3.00 at the end of the year. Dividends are expected to grow at a constant rate of 3% indefinitely. Calculate the required rate of return on Softec shares. A. 10% В. 33% С. 7% D. 4.3% 2. 3. The yield to maturity on a bond A. is fixed in the indenture B. is lower for higher-risk bonds C. is the required return on the bond D. is generally equal to the coupon interest rate 4. If there is a 20% chance we will get a 16% return, a 30% chance of getting a 14% return, a 40% chance of getting a 12% return and a 10% chance of getting an 8% return, what is the expected rate of return? А. 12% В. 13% С. 14% D. 15%
Transcribed Image Text:1. A credit union will loan you $25,000 for three years to buy a boat. The loan must be repaid in 78 equal fortnightly payments. The annual interest rate on the loan is 7%. What is the amount of the fortnightly payments? A. $1,758.98 B. $358.82 C. $355.77 D. $288.47 Shares in Softec Ltd. is currently selling for $42.86. It is expected to pay a dividend of $3.00 at the end of the year. Dividends are expected to grow at a constant rate of 3% indefinitely. Calculate the required rate of return on Softec shares. A. 10% В. 33% С. 7% D. 4.3% 2. 3. The yield to maturity on a bond A. is fixed in the indenture B. is lower for higher-risk bonds C. is the required return on the bond D. is generally equal to the coupon interest rate 4. If there is a 20% chance we will get a 16% return, a 30% chance of getting a 14% return, a 40% chance of getting a 12% return and a 10% chance of getting an 8% return, what is the expected rate of return? А. 12% В. 13% С. 14% D. 15%
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