FIN300 Spring 2013 Midterm #1 Study Guide General instructions: 1. This is NOT a comprehensive list of topics that may be covered on your exam. All the lecture material and everything from chapters 1-9 in your textbook (with noted exceptions) is fair game. However, it is probably a good idea to emphasize these topics when you study for the test. 2. Understanding the concepts is a prerequisite for succeeding in this course. 3. You should practice solving problems until you feel comfortable you can solve all of them correctly in a reasonable amount of time without referring to your lecture notes or textbook. The pool of practice problems includes practice problem sets posted on Compass, old exams, in-class problems, lecture examples and end of chapter problems from your textbook. 4. I will give you a formula sheet on the exam (see old midterms), but you still need to know where things come from and how to use them 5. The list of topics below is intended to give you a summary of the material we have covered. Ideally it will help you organize your time when preparing for the exam. 6. Do not assume that the exams will be identical in each section – it may turn out to be a costly mistake. 7. You may not take the midterm with a different instructor. 8. Please, don’t forget to bring approved calculators, pencils/pens, and erasers to the exam. You may want to bring a small ruler as well. 10. Exams will start and end on time (no extra 5 minutes for latecomers).

Key topics/concepts Lecture 1 CHAPTER 1 - Why do financial markets exist? - What is the difference between a primary and a secondary market? - What do we mean by efficiency (weak, semi-strong, strong. - Characteristics of efficient markets. Lecture 2 CHAPTER 2: - Interest on Interest: Know how to compute it - Know how to calculate gross and simple holding period returns (HPRs) - Given a series of cash flows, know how to calculate the cash flow adjusted

...Ryerson University
CFIN300
Midterm Exam
Fall 2007
There are 2.0 hours in this exam.
Version A
Student Name ____________________________
(Please Print)
Student Number _________________________________
Notes:
1. This is a closed book exam. You may only have pens, pencils and a calculator at
your desk.
2. A formula sheet is attached to the end of the exam. You may detach the formula
sheet from the exam.
Please fill out the scanner sheet as you go along in the exam. You will not be given extra time at the end of the exam to fill it out.
3. Select the best possible answer for each multiple-choice question
4. Each of the 30 MC questions is worth 1 mark
Marks: Available
Total 30 _________
There are 14 pages in this exam.
|2. |Poor Dog, Inc. borrowed $135,000 from the bank today. They must repay this money over the next six years by making monthly |
| |payments of $2,215.10. What is the interest rate on the loan? Express your answer with annual compounding. |
|A) |5.98% |
|B) |6.63% |
|C) |4.71%...

...
1.
Poor Dog, Inc. borrowed $135,000 from the bank today. They must repay this money over the next six years by making monthly payments of $2,215.10. What is the interest rate on the loan? Express your answer with annual compounding.
A)
5.98%
B)
6.63%
C)
4.71%
D)
5.65%
E)
5.80%
2.
How much would you pay for a security that pays you $500 every 4 months for the next 10 years if you require a return of 8% per year compounded monthly?
A)
$11,228.48
B)
$15,000.00
C)
$10,260.00
D)
$13,724.90
E)
$10,200.23
3.
You can earn 5% per year compounded annually for the next 4 years, followed by 8% per year compounded quarterly for 5 years. What is the average annual compounded rate of return over the 9 year period? Express your answer with monthly compounding.
A)
B)
6.82%
C)
6.97%
D)
6.43%
E)
6.59%
4.
You have just purchased a house for $540,000 with a $200,000 down payment. You are going to get a mortgage at the TF bank for the balance. TF is charging a rate of 5.8% per year compounded semi-annually on 5 year term mortgages. You want to make weekly payments amortized over 20 years. What is your weekly payment?
A)
$877.60
B)
$549.01
C)
$545.47
D)
E)
$871.92
5.
Master Meter is planning on constructing a new $20 million facility. The company plans to pay 20% of the cost in cash and finance the balance. How much will each monthly loan payment be if they can borrow the necessary funds for 30 years at 9% per year...