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A deposit of 400 € will be worth 750 € in 5 years time. The yearly inflation rate is estimated at 1%. The compounded annual interest rate is: " with steps"

a.12.8%

b.18.3%

c.11.6%

d.13.4%

e.15.2%


A mutual fund might produce 5% return, with 40% probability, and 4% return, with 60% probability. Thus the standard deviation of this asset is: " with steps"

 

a.1.67%

b.0.49%

c.0.34%

d.0.65%

e.0.23%


A deposit of 1 000 $ works with an interest rate of 3%. The deposit's amount, in 2 years time, will be 1 061 $. The total interest earned from this financial placement and the interest earned after one year, are: " with steps"

a.20 $ and 61 $

b. 31 $ and 60 $

c. 61 $ and 30 $

d. 50 $ and 20 $

e. 30 $ and 60 $


One of the following statements is true:


a. the NPVinvest is a sum of future values

b. a rational investor seeks a higher risk to return ratio from all investment alternatives

c. the lowest risk on the financial market is characteristic to state bonds

d. deposits are usually inflated by the central bank

e. normal probability distribution is common on the US stock exchange


A deposit of 1 000 $ works with an interest rate of 3%. The deposit's amount, in 2 years time, will be 1 061 $. The total interest earned from this financial placement and the interest earned after one year, are: " with steps"

a.61 $ and 30 $

b.31 $ and 60 $

c.20 $ and 61 $

d.50 $ and 20 $

e.30 $ and 60 $



A share yields the following future dividends: 40 €, 20 €, 50 €. The opportunity cost of investment, as quantified by a finance practitioner is 7%. The share can be bought today for 200 € and is going to be sold for 250 €, after 3 years. The percentage value dividend yield and the net present value of this financial investment, are: " with steps "

a. 159% and 250 €

b. 73% and 180 €

c. 34% and 120 €

d. 55% and 100 €

e. 25% and 120 €


A mutual fund might produce 5% return, with 40% probability, and 4% return, with 60% probability. Thus the standard deviation of this asset is: " with steps "

a. 0.23%

b. 1.67%

C. 0.65%

d. 0.49%

e. 0.34%


A share is yielding constant dividends for 5 years and is going to be sold for 400 € at the beginning of the 6th year. The annual dividend is equal to 50 €. The issuing company is financed both by equity and debt and has a WACC of 8%. The dividend yield for 5 years and the financial value of the share, are: "| with steps "


a. 180 € and 139 €

 b. 250 € and 472 €

c. 170 € and 200 €

d. 560 € and 325 €

e. 240 € and 235 €


The market for wheat has the following demand and supply schedules:


PRICE (kwacha) QUANTITY DEMANDED QUANTITY SUPPIED


4 10,000 8,000


8 8,000 8,000


12 6,000 8,000


16 4,000 8,000


20 2,000 8,000


a) Graph the demand and supply curves. What is the equilibrium price and quantity in this


market? (5 Marks) What is unusual about this supply curve?[1] Why might this be true?[1]


b) If the actual price in this market were above the equilibrium price, what would drive the


market toward the equilibrium? (1 Marks)


c) If the actual price in this market were below the equilibrium price, what would drive the


market toward the equilibrium? (1 Marks)


d) Differentiate inferior good from Normal good [1 mark]

What are the main features of the perfectly competitive market?

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