Download the template below. Save the file on your desktop with your name and exam number; example:  MoserHelenExam1. You will have to “enable editing” You will have to “ok” navigating away from the page Save the file regularly during the exam (Ctrl S) After you complete the exam, save the file again and upload in last question Exam 1 Template

Which of the following is NOT a situation where a trader is able to identify positive NPV trading opportunities in the securities markets?

The British government has a Consol bond outstanding that pays 100 British Pounds in interest each year forever.   Assuming that the current interest rate in Great Britain is 6% and that you will receive your first interest payment one year from now, then the value of the Consol bond is closest to:

You are considering investing in Change Airlines at the current market price of $30.   The company just paid a dividend of $2, and dividends are expected to grow at 5% per year.  You have looked on Yahoo! Finance and found a beta for the company of 1.3.  If you see that Treasuries have a rate of 2.5% and the long-term market risk premium is 7.5%, should you buy Change Airlines today?

You are considering buying Goggle stock and see the beta is 1.75, the risk-free rate is 3%, and the expected return on the market is 8%.  What is the required return on Goggle?

Benefactor Cumbersome has $25 million in debt with a cost of 4%, $5 million in preferred stock with a cost of 6%, and $30 million in equity with a cost of 10%.  If the tax rate is 21%, the weighted average cost of capital is closest to:

When we express the value of a cash flow or series of cash flows in terms of dollars today, we call it the ________ of the investment. If we express it in terms of dollars in the future, we call it the ________.

You are considering buying Goggle stock and see the beta is 1.25, the risk-free rate is 3%, and the expected return on the market is 8%. What is the required return on Goggle?

Because depository institutions are funded by small investments (such as checkings and savings of individuals), they face less regulation than those funded by larger investments.

Credit Unions are not considered depository institutions because they have members instead of customers.