Blog

Suppose you pay 24% as a nominal annual rate on your credit card.  If you make monthly payments with monthly compounding, what is your effective annual rate?

All else equal, the fair (or intrinsic) price of a stock should fall if the market risk premium decreases according to the CAPM model.

Meacham Enterprises’ bonds currently sell for $1,280 and have a par value of $1,000. They pay a $135 annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,050. What is their yield to call (YTC)?

A 15-year bond has an annual coupon rate of 8%.  The coupon rate will remain fixed until the bond matures.  The bond has a yield to maturity of 6%.  Which of the following statements is CORRECT?

Your bank is willing to lend you $35,000 on a 72 month loan having an Annual Percentage Rate (APR) of 3% compounded monthly. What will be the monthly payment on this loan?

If $1000 is placed in an account that earns a nominal 16 percent, compounded quarterly, what will it be worth in 5 years?

Your bank account pays a 12% nominal rate of interest.  The interest is compounded monthly.  Which of the following statements is CORRECT?

Rule 72 assumes an interest rate around 10.4% and says that money should double every 7 years.

Rule 72 assumes an interest rate around 10.4% and says that money should double every 2 years.

You have just invested $5,000 in a stock market mutual fund that you think will generate a return of 10% per year. What is the anticipated future value of this investment in 10 years?