# FIN 534 MIDTERM PART 2

**Tutor description**

This exam consist of 25 multiple choice questions and covers the material in Chapters 4 through 7. 1. At the end of 10 years, which of the following investments would have the highest future value? Assume that the effective annual rate for all investments is the same and is greater than zero. Answer Investment A pays $250 at the beginning of every year for the next 10 years (a total of 10 payments). Investment B pays $125 at the end of every 6-month period for the next 10 years (a total of 20 payments). Investment C pays $125 at the beginning of every 6-month period for the next 10 years (a total of 20 payments). Investment D pays $2,500 at the end of 10 years (just one payment). Investment E pays $250 at the end of every year for the next 10 years (a total of 10 payments). 2. Which of the following statements is CORRECT? Answer An investment that has a nominal rate of 6% with semiannual payments will have an effective rate that is smaller than 6%. The present value of

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