MCQ'S: 16) An insurance company offers you an end-of-year annuity of $48,000 per year for the next 20 years. They claim your return on the annuity is 9 percent. What should you be willing to pay today for this annuity?
MCQ'S:
16) An insurance company offers you an end-of-year
a.$429,600
b.$398,144
c.$438,192
d.$408,672
17) Al Corbin is 25 years old today and wishes to accumulate enough money over the next 35 years to provide for a 20-year retirement annuity of $100,000 at the beginning of each year, starting with his 60th birthday. He can save $2,000 at the end of each of the next 10 years and $3,000 each year for the following 10 years. How much must he save each year at the end of years 21 through 35 to obtain his goal? Assume that the average
a.$9,642
b.$24,289
c.$12,321
d.$26,969
18) Firms carry out share repurchase agreements in a number of ways, including all of the following EXCEPT they __.
a.buy treasury shares
b.buy from shareholders through a tender offer
c.buy outstanding shares in the open market
d.negotiate a purchase privately from large holders, particularly institutions
19) Finding the discounted current value of $1,000 to be received at the end of each of the next 5 years requires calculating the __.
a.present value of an annuity due
b.future value of an annuity
c.present value of an annuity
d.future value of an annuity due
20) Bond refunding occurs when a company redeems a callable issue and sells a(n) __.
a.equity issue, thereby reducing outstanding debt
b.lower-cost issue
c.preferred issue with a low
d.None of these are correct
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
