Fin300 Midterm

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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% | |D) |5.65% | |E) |5.80% |

|3. |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 |

|4. |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% |

|5. |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...
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