Ma Practice Question Essay Example

Ma Practice Question Paper Practice Questions: Time Value of Money (TVM) Its Applications in Investments 1. Jose now has $500. How much would he have after 6 years if he leaves it invested at 5. 5% with annual compounding? a. $591. 09 b. $622. 20 c. $654. 95 d. $689. 42 e. $723. 89 N6 I/YR5. 5% PV$500 PMT$0 FV$689. 42 2. How much would $5,000 due in 25 years be worth today if the discount rate were 5. 5%? a. $1,067. 95 b. $1,124. 16 c. $1,183. 33 d. $1,245. 61 e. $1,311. 17 N25 I/YR5. 5% PMT$0 FV$5,000 PV$1,311. 17 3. Suppose the U. S. Treasury offers to sell you a bond for $747. 5. No payments will be made until the bond matures 5 years from now, at which time it will be redeemed for $1,000. What interest rate would you earn if you bought this bond at the offer price? a. 4. 37% b. 4. 86% c. 5. 40% d. 6. 00% e. 6. 60% N5 PV$747. 25 PMT$0 FV$1,000. 00 I/YR6. 00% 4. You sold a car and accepted a note with the following cash flow stream as your payment. What was the effective price you received for the car assum ing an interest rate of 6. 0%? Years:01234 ||||| CFs:$0$1,000$2,000$2,000$2,000 a. $5,987 b. $6,286 c. $6,600 d. $6,930 e. $7,277 I/YR = 6. 0% 01234 CFs:$0$1,000$2,000$2,000$2,000 PV of CFs:$0$943$1,780$1,679$1,584 PV = $5,987Found using the Excel NPV function. PV = $5,987Found by summing individual PVs. PV = $5,987Found using the calculator NPV key. 5. At a rate of 6. 5%, what is the future value of the following cash flow stream? Years:01234 ||||| CFs:$0$75$225$0$300 a. $526. 01 b. $553. 69 c. $582. 83 d. $613. 51 e. $645. 80 I/YR = 6. 5% 01234 CFs:$0$75$225$0$300 FV of CFs:$0$91$255$0$300 FV = $645. 80Found by summing individual FVs. FV = $645. 80Found with the NFV key in some calculators. FV = $645. 80Found with a calculator by first finding the PV of the stream, then finding the FV of that PV. PV of the stream:$501. 99 FV of the PV:$645. 80 6. What’s the future value of $1,500 after 5 years if the appropriate interest rate is 6%, compounded semiannually? a. $1,819 b. $1,915 c. $2,016 d. $2,117 e. $2,223 Years5 Periods/Yr2 Nom. I/YR6. 0% N = Periods10 PMT$0 I = I/Period3. 0% PV = $1,500 Could be found using a calculator, an equation, or Excel. FV = $2,016 Note that we must first convert to periods and rate per period 7. We will write a custom essay sample on Ma Practice Question specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Ma Practice Question specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Ma Practice Question specifically for you FOR ONLY $16.38 $13.9/page Hire Writer An investor plans to buy a common stock and hold it for two years. The investor expects to receive $1. 5 in dividend a year and $26 from the sales of the stock at the end of year 2. If the investor wants a 15% return (compound annually), the maximum price the investor should pay for the stock today is roughly: A). $24 B). $28 C). $22 D). $32 E). $26 C). $22 (n=2, pmt = 1. 5, fv = 26, I = 15%, PV = ? ) 8. Morin Companys bonds mature in 8 years, have a par value of $1,000, and make an annual coupon interest payment of $65. The market requires an interest rate of 8. % on these bonds. What is the bonds price? a. $903. 04 b. $925. 62 c. $948. 76 d. $972. 48 e. $996. 79 N8 I/YR8. 2% PMT$65 FV$1,000 PV$903. 04 9. Sadik Inc. s bonds currently sell for $1,180 and have a par value of $1,000. They pay a $105 annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,100. What is their yield to call (YTC)? a. 6. 63% b. 6. 98% c. 7. 35% d. 7. 74% e. 8. 12% N5 PV$1,180 PMT$105 FV$1,100 I/YR = YTC7. 74% 10. Assume that you are considering the purchase of a 20-year, noncallable bond with an annual coupon rate of 9. %. The bond has a face value of $1,000, and it makes semiannual interest payments. If you require an 8. 4% nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond? a. $1,105. 69 b. $1,133. 34 c. $1,161. 67 d. $1,190. 71 e. $1,220. 48 Par value$1,000 Coupon rate9. 5% Periods/year2 Yrs to maturity20 Periods = Yrs to maturity ? Periods/year40 Required rate8. 4% Periodic rate = Required rate/2 = I/YR4. 20% PMT per period = Coupon rate/2 ? Par value$47. 50 Maturity value = FV$1,000 PV$1,105. 69

Sample Why Us? Essay

Sample Why Us? EssayYou need to write a sample Why Us? Essay on application to your medical school. The reason for the sample varies and will be determined by your medical school.Medical schools have a lot of students applying to their school and as such they need an essay that is as simple as possible. This is going to help them decide who to admit.Your needs are going to be determined by your specific requirements for admissions into the medical school. You need to answer a couple of questions so that the admissions committee knows what you want.The first question in the sample Why Us? The essay is about your life prior to the beginning of medical school. This essay can range from birth to six months after medical school starts, but it is important to include all of the information they ask for.The second question is a follow up for the sample essay. The committee will want to know if you still live in the area where you were applying to medical school. This will help them determin e if you live in the neighborhood where you will be living when you attend medical school.Finally, the applicant is going to be asked if he or she has attended college. There are many different types of programs offered and this is the only true indication as to whether or not the applicant will be attending college after medical school. It is very important to answer this question for both the type of program they offer and the type of degree they are hoping to receive.Your personal statement, why us? The essay is also a very important part of your application. It is used to spell out what exactly you hope to gain from medical school.Your sample Why Us? Essay should be as concise as possible.