____1.The present value of an annuity will be decreased by ____2.You have borrowed $130,000 to buy a new motor home. Your loan is to be repaid over 15 years at 8% compounded monthly Calculate the...

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____1.The present value of an annuity will be decreased by ____2.You have borrowed $130,000 to buy a new motor home. Your loan is to be repaid over 15 years at 8% compounded monthly Calculate the principal paid to the bank in month 2 of the loan. ____3.A car loan that charges 1.25% interest per month has an annual percentage rate of ____4.Alabama Power has preferred stock that pays an annual dividend of $9.44. If the security has no maturity, what is its value to an investor who wishes to obtain a 9 percent rate of return? ____5.If you owe $1,200.00, which is the most advantageous way to pay it back assuming a 12% APR discount rate? ____6.Which of the following $1,000 face value bonds has a 10% yield, assuming semiannual coupon payments of 8%? 1) a 5 year maturity bond selling for $964.54 2) a 10 year maturity bond selling for $875.39 3) a 20 year maturity bond selling for $828.36 ____7.When interest rates decrease, what happens to the bond prices of seasoned issues (assume the coupon rate is fixed)? ____8.How is preferred stock similar to bonds? ____9.Nearly all preferred stock comes with the right to receive all past unpaid dividends before common shareholders can receive any dividends. This right is referred to as: ____10.The efficient market hypothesis asserts that: ____11.The current price of Zebar is $32.00 and its last dividend was $.60. What is its return if dividends are expected to grow indefinitely at 8 percent? 12.You have been assigned to estimate the interest rates that your company may have to pay when borrowing money in the near future. The following information is available. kPR = 2% MR = .1% for a 1 year loan increasing by .1% for each additional year LR = .05% for a 1 year loan increasing by .05% for each additional year DR = 0 for a 1 year loan, .2% for a 2 year loan, increasing.1% for each additional year Expected Inflation Rates Year 1 = 7% Year 2 = 5% Year 3 and thereafter = 3% a. Calculate the inflation adjustment (INFL) for a 5-year loan. b. Calculate the appropriate interest rate for a 5-year loan. 13.One year ago a $1,000 face value, 6% coupon bond was selling for $1,100. Since then, the market yield has decreased by two percentage points. The bond pays interest semiannually and now has four years to maturity. What is the bond's price today?