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Busn602 Midterm Exam

  • Date Submitted: 03/30/2016 10:06 PM
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BUSN602 Midterm Exam
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Part 1 of 1 - 100.0 Points
Question 1 of 20 5.0 Points
As interest rates fall, the prices of existing bonds will:

 
A.rise  
B.stay the same  
C.fall  
D.either a or b, depending on the state of the economy  
E.none of the above
 
Question 2 of 20 5.0 Points
You need to have $35,000 on hand to buy a new Lexus five years from today. To achieve that goal, you want to know how much you must invest today in a certificate of deposit guaranteed to return you 3% per year. To help determine how much to investment today, you will use:

 
A.present value factors  
B.annuity value factors  
C.present value factors of an annuity  
D.future value factors of an annuity
 
Question 3 of 20 5.0 Points
If you expect the inflation premium to be 2%, the default risk premium to be 1% and the real interest rate to be 4%, what interest would you expect to observe in the marketplace under the simplest form of market interest rates?

 
A.4%  
B.7%  
C.2%  
D.1%
 
Question 4 of 20 5.0 Points
The price level of goods and services may be expressed as the ratio of _____________.

 
A.GDP to GNP  
B.real output to GDP  
C.Velocity to GDP  
D.real output to velocity  
E.none of the above

Question 5 of 20 5.0 Points
John deposits $2,000 per year at the end of the year for the next 20 years into an IRA account that pays 6%. How much will John have on deposit at the end of 20 years?

 
A.$67,520  
B.$73,572  
C.$81,990  
D.$75,686
 
Question 6 of 20 5.0 Points
The most important savings surplus unit in the economy is:

 
A.the savings of individuals  
B.corporate savings  
C.U.S. government savings  
D.state and local government savings
Question 7 of 20 5.0 Points...

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