FRL (Finance, Real Estate, Law) 300 Test Guide 2
Test 2 will be based on chapters 7 and 8 plus one numerical problem from chapter 6. The test will be for a total of 80 points. There will be twenty 2-point questions on concepts and definitions and eight 5-point problems. Here is a description of the types of question and problems.
1. Concepts and definitions based on the two chapters and class discussions.
2. Numerical problems related to the following:
a. Loan amortization.
b. Value of bond, with both annual and semi-annual coupon
c. Bond yield to maturity, current yield, and capital gain.
d. Real and nominal interest rates.
e. Value of preferred stocks.
f. Value of common stocks, the case of constant dividends growth .
g. Value of common stocks, the case of multiple dividend growth rates.
h. Common stock total yield, dividend yield, and capital gain.
Note: Please bring one scantron. You can bring your financial calculator, a photocopy of the appendix in you text containing formulas, and a copy of the time value of money tables. No handwritten notes or scratch paper would be allowed.