12. A credit card is offered with monthly payments and a 21.99% APR. What is the loan's effective annual rate (EAR)? EAR:
13. Calculate the price of a $1,000 bond, offering a 12% coupon payment with 15 years left to maturity and a market interest rate of 10%. (Assume interest payments are semiannual.) Is this a discount or premium bond?
14. On July 25, 2014, the Dow Jones Industrial Average opened $17,083.80 and closed at $16,960.57. What was the effective annual rate return (in percent) of the stock market that day?
Daily Return: EAR:
15. Financial analysts forecast GDY Inc.’s growth for the future to be 3%. GDY's recent annual dividend was $2.00. What is the value of GDY stock when the required return is 11%?
Stock Value: $
16. URN Inc. recently paid a $5.00 annual dividend. The dividend is expected to grow at a 4% rate. At a current stock price of $52, what is the return shareholders are expecting?