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14) Consider an economy with two types of firms, S and I. S firms always move together, but I firms 14) move independently of each o her. For both types of firms there is a 40% probability that the firm will have a 20% return and a 60% probability that the arm will have a-30% return. The standard deviation for the return on an individual firm is closest to A)-10.00% B) 12.25% C)980% D) 24.49% 15) Consider an economy with two types of firms, S and L. S firms always move together, but I firms 15) move independently of each other For both types of firms there is a 70% probability that the firm will have a 20% return and a 3 probability that the finn will have a-30% return The standard deviation for the return on an portfolio od 20 type S firms is closest to A) 4,58% B) 13.75% C)500% D) 2291% 16) Ursula wants to buy a $19,000 used car. She has savings of $2,000 plus an $800 trade-in. She 16) wants her monthly payments to be about $282. Which of the following loans offers monthly payments closest to 52527 A) 75% APR for 48 months C)78% APR for 36 months B) 75% APR for 72 months D) 7.8% APR for 60 months Use the Pigure for the questions) beloe. Zero Coupon Yield Curve 3.5 2 2.5 Maturity (years) 17) The current zero-coupon yield curve for risk-free bonds is shown above. What is the price of a 17) zero-coupon, four-year, risk-free bond of $100? A) $87.99 B) $96.67 C) $92.15 D) 585.64 18) Which of the following statements regarding bonds and their terms is FALSE? 8) A) Zero-coupon bonds are also called pure discount bonds B) When prices are quoted in the bond market, they are conventionally quoted in increments of $1,000 from holding the bond to maturity and receiving the promised face value payment the net present value (NPV) of the investment opportunity is equal to zero. C) The yield to maturity for a zero-coupon bond is the retun you will earn as an investor D) The intemal rate of return (IRR) of an investment opportunity is the discount rate at which

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