Questions from Personal Finance

Q: Mr. and Mrs. Jones own 640 acres of farmland deeded

Mr. and Mrs. Jones own 640 acres of farmland deeded as “joint tenants, not as tenants in common.” Currently, the land is appraised at $3,000 per acre and continues to escalate annually in value. In ad...

Q: Item A has an NPV of $300 and an original cost

Item A has an NPV of $300 and an original cost of $500. Item B has an NPV of $350 and an original cost of $700. What is the profitability index (PI) of items A and B, and which is a more attractive in...

Q: Which of the following circumstances would definitely cause the date-of

Which of the following circumstances would definitely cause the date-of-death value of the gifted property to be included in the donor’s gross estate? 1. Donor retains a life estate in the gift proper...

Q: While deciding whether to equalize the estates at the death of the

While deciding whether to equalize the estates at the death of the first spouse or to defer estate taxes until the death of the surviving spouse, it is important to consider 1. the age and health of t...

Q: Which combination of the following statements about investment risk is correct?

Which combination of the following statements about investment risk is correct? 1. Beta is a measure of systematic, non diversifiable risk. 2. Rational investors will form portfolios and eliminate sys...

Q: A $1,000 bond originally issued at par maturing in

A $1,000 bond originally issued at par maturing in exactly 10 years bears a coupon rate of 8 percent compounded annually and a market price of $1,147.20. The indenture agreement provides that the bond...

Q: The Zeta Corporation’s current dividend is $3.85. If

The Zeta Corporation’s current dividend is $3.85. If future dividends are expected to grow at 4 percent forever, which of the following amounts should Zeta stock sell for if the required rate of retur...

Q: Given the following diversified mutual fund performance data, which fund had

Given the following diversified mutual fund performance data, which fund had the best risk-adjusted performance if the risk-free rate of return is 5.7 percent? a. Fund B because the annual return is...

Q: The standard deviation of the returns of a portfolio of securities will

The standard deviation of the returns of a portfolio of securities will be__________________ the weighted average of the standard deviation of returns of the individual component securities. a. equal...

Q: Match the investment characteristics listed below with the appropriate type of investment

Match the investment characteristics listed below with the appropriate type of investment company in the items that follow. A. Passive management of the portfolios. B. Shares of the fund are normally...