FNAN 522 Exam (Module 2 HW)
Questions Well Answered 2026-2027
Updated.
A company issues a bond with the provision that it may pay off the debt early. This bond is
subject to which type of risk?
Select one:
a. Prepayment risk.
b. Model risk.
c. Interest rate risk.
d. All of the above. - Answer a. Prepayment risk.
What will $247,000 grow to be in 9 years if it is invested today in an account with an annual
interest rate of 11%?
Select one:
a. $96,558.42
b. $637,365.32
c. $631,835.12
d. $351,268.46 - Answer c. $631,835.12
Approximately how many years will it take for $136,000 to grow to be $468,000 if it is invested
in an account with an annual interest rate of 8%? Choose the closest answer.
Select one:
a. Error 5.
b. 16 years.
c. 11 years.
d. 21 years. - Answer b. 16 years.
At what annual interest rate must $137,000 be invested so that it will grow to be $475,000 in 14
years? Choose the closest rate.
Select one:
a. 11.58%
b. 9.29%
c. 3.2%
d. 15.69% - Answer b. 9.29%
, If you wish to accumulate $197,000 in 5 years, how much must you deposit today in an account
that pays a quoted annual interest rate of 13% with semi-annual compounding of interest?
Round to the nearest dollar.
Select one:
a. $104,947
b. $58,034
c. $143,787
d. $106,924 - Answer a. $104,947
What will $153,000 grow to be in 13 years if it is invested today in an account with a quoted
annual interest rate of 10% with monthly compounding of interest? Round to the nearest dollar.
Select one:
a. $558,386
b. $368,431.45
c. $253,605.32
d. $528,197.50 - Answer a. $558,386
You are offered an investment with a quoted annual interest rate of 13% with quarterly
compounding of interest. What is your effective annual interest rate?
Select one:
a. 13.65%
b. 15.23%
c. 12.48%
d. 11.01% - Answer a. 13.65%
You are offered an annuity that will pay $24,000 per year for 11 years (the first payment will
occur one year from today). If you feel that the appropriate discount rate is 13%, what is the
annuity worth to you today? Round to the nearest dollar.
Select one:
a. $92,061
b. $136,487
c. $142,743
d. $6,257 - Answer b. $136,487
You plan to buy a car that has a total "drive-out" cost of $25,700. You will make a down
payment of $3,598. The remainder of the car's cost will be financed over a period of 5 years.
You will repay the loan by making equal monthly payments. Your quoted annual interest rate is
Questions Well Answered 2026-2027
Updated.
A company issues a bond with the provision that it may pay off the debt early. This bond is
subject to which type of risk?
Select one:
a. Prepayment risk.
b. Model risk.
c. Interest rate risk.
d. All of the above. - Answer a. Prepayment risk.
What will $247,000 grow to be in 9 years if it is invested today in an account with an annual
interest rate of 11%?
Select one:
a. $96,558.42
b. $637,365.32
c. $631,835.12
d. $351,268.46 - Answer c. $631,835.12
Approximately how many years will it take for $136,000 to grow to be $468,000 if it is invested
in an account with an annual interest rate of 8%? Choose the closest answer.
Select one:
a. Error 5.
b. 16 years.
c. 11 years.
d. 21 years. - Answer b. 16 years.
At what annual interest rate must $137,000 be invested so that it will grow to be $475,000 in 14
years? Choose the closest rate.
Select one:
a. 11.58%
b. 9.29%
c. 3.2%
d. 15.69% - Answer b. 9.29%
, If you wish to accumulate $197,000 in 5 years, how much must you deposit today in an account
that pays a quoted annual interest rate of 13% with semi-annual compounding of interest?
Round to the nearest dollar.
Select one:
a. $104,947
b. $58,034
c. $143,787
d. $106,924 - Answer a. $104,947
What will $153,000 grow to be in 13 years if it is invested today in an account with a quoted
annual interest rate of 10% with monthly compounding of interest? Round to the nearest dollar.
Select one:
a. $558,386
b. $368,431.45
c. $253,605.32
d. $528,197.50 - Answer a. $558,386
You are offered an investment with a quoted annual interest rate of 13% with quarterly
compounding of interest. What is your effective annual interest rate?
Select one:
a. 13.65%
b. 15.23%
c. 12.48%
d. 11.01% - Answer a. 13.65%
You are offered an annuity that will pay $24,000 per year for 11 years (the first payment will
occur one year from today). If you feel that the appropriate discount rate is 13%, what is the
annuity worth to you today? Round to the nearest dollar.
Select one:
a. $92,061
b. $136,487
c. $142,743
d. $6,257 - Answer b. $136,487
You plan to buy a car that has a total "drive-out" cost of $25,700. You will make a down
payment of $3,598. The remainder of the car's cost will be financed over a period of 5 years.
You will repay the loan by making equal monthly payments. Your quoted annual interest rate is
