It is commonly accepted that a perpetuity must continue… Show more Question 36 2 points 2 points 2 points 2 points 2 points Save It is commonly accepted that a perpetuity must continue for at least 50 years. It is commonly accepted that a perpetuity must continue for at least 50 years. True False True False Question 37 2 points 2 points 2 points 2 points 2 points Save The total amount of interest that a 10-year investment earns will exactly double when the stated annual interest rate is doubled. The total amount of interest that a 10-year investment earns will exactly double when the stated annual interest rate is doubled. True False True False Question 38 2 points 2 points 2 points 2 points 2 points Save An indenture is an agreement between the bond issuer and a trustee who represents the interests of the bond investors. An indenture is an agreement between the bond issuer and a trustee who represents the interests of the bond investors. True False True False Question 39 2 points 2 points 2 points 2 points 2 points Save Podunk Communications bonds mature in 6 1/2 years with a par value of $1,000. They pay a coupon rate of 9% with semi-annual payments. If the required rate of return on these bonds is 11% what is the bond’s value? Podunk Communications bonds mature in 6 1/2 years with a par value of $1,000. They pay a coupon rate of 9% with semi-annual payments. If the required rate of return on these bonds is 11% what is the bond’s value? $1,026.73 $973.76 $1,022.74 $908.83 $1,026.73 $973.76 $1,022.74 $908.83 Question 40 2 points 2 points 2 points 2 points 2 points Save The appropriate measure for risk according to the capital asset pricing model is: The appropriate measure for risk according to the capital asset pricing model is: the standard deviation of a firm’s cash flows alpha the coefficient of variation of a firm’s cash flows none of the above the standard deviation of a firm’s cash flows alpha the coefficient of variation of a firm’s cash flows none of the above Question 41 2 points 2 points 2 points 2 points 2 points Save What is the present value of $12,500 to be received 10 years from today? Assume a discount rate of 8% compounded annually and round to the nearest $10. What is the present value of $12,500 to be received 10 years from today? Assume a discount rate of 8% compounded annually and round to the nearest $10. $5,790 $11,574 $9,210 $17,010 $5,790 $11,574 $9,210 $17,010 Question 42 2 points 2 points 2 points 2 points 2 points Save The formula for present value is: The formula for present value is: PV = FVn(1+i) n PV = (1+i)/FVn PV = FVn/(1+i) n PV = FVn(1+n) -i PV = FVn(1+i) n PV = (1+i)/FVn PV = FVn/(1+i) n PV = FVn(1+n) -i • Show less