Page I 1 ( Compound value solving/or 11) How many years will the following take? a. $500 to grow to $1,419.71 if invested at 11 percent compounded annually b. $38 to grow to $65. 1 3 if invested at 8 percent compounded annually c. $ 120 to grow to $523.62 if invested at 12 percent compounded annually d. $51 to grow to $62.05 if invested at 4 percent compounded annually a. How many years wil l it take for $500 to grow to $1,419.71 if invested at 11 percent compounded annually? _ years (Round to the nearest whole number.) b. How many years will it take for $38 to grow to $65.13 if invested at 8 percent compounded annually? _ years (Round to the nearest whole number.) c. How many years will it take for $ 120 to grow to $523.62 i f invested at 12 percent compounded annually? _ years (Round to the nearest whole number.) d. How many years will it take for $51 to grow to $62.05 if invested at 4 percent compounded annually? _ years (Round to the nearest whole number.) 2 . (Present value) What is the present value of the following future amounts? a. $600 to be received 9 years from now discounted back to the present at 9 percent. b. $200 to be received 7 years from now discounted back to the present at 7 percent. c. $1,200 to be received 12 years from now discounted back to the present at 5 percent. d. $1,200 to be received 5 years from now discounted back to the present at 17 percent. a. What is the present value of $600 to be received 9 years from now cliscounted back to the present at 9 percent? $_ (Rou nd to the nearest cent.) b. What is the present value of $200 to be received 7 years from now discounted back to the present at 7 percent? $_ (Round to the nearest cent.) c. What is the present value of $1,200 to be received 12 years from now discounted back to the present at 5 percent ? $_ (Roun d to the nearest cent.) d. What is the present value of $1,200 to be received 5 years from now discounted back to the present at 17 percent? $_ (Rou nd to the nearest cent.) Page 3 3 . (Future value) Sarah Wiggum would like to make a single lump-sum investment and have $ 1.9 million at the time of her retirement in 26 years. She has found a mutual fund that expects to earn 4 percent annually. How much must Sarah invest today? If Sarah earned an annual return of 15 percent, how much must she invest today? a. IfSarah can earn 4 percent annually for the next 26 years; how much will she have to invest today? $_ (Round to the nearest cent.) b. If Sarah can earn 15 percent annually for the next 26 years, how much will she have to invest today? $_ (Round to the nearest cent.) 4 . (Loan amortization ) Mr. Bill S. Preston, Esq., purchased a new house for $ 160,000. He paid $20,000 down and agreed to pay the rest over the next 10 years in 10 equal end-of-year payments plus 7 percent compound interest on the unpaid balance. What will these equal payments be? The e.

1. Page I
1 ( Compound value solving/or 11) How many years will the
following take?
a. $500 to grow to $1,419.71 if invested at 11 percent
compounded annually
b. $38 to grow to $65. 1 3 if invested at 8 percent compounded
annually
c. $ 120 to grow to $523.62 if invested at 12 percent
compounded annually
d. $51 to grow to $62.05 if invested at 4 percent compounded
annually
a. How many years wil l it take for $500 to grow to $1,419.71 if
invested at 11 percent compounded annually?
_ years (Round to the nearest whole number.)
b. How many years will it take for $38 to grow to $65.13 if
invested at 8 percent compounded annually?
_ years (Round to the nearest whole number.)
c. How many years will it take for $ 120 to grow to $523.62 i f
invested at 12 percent compounded annually?

2. _ years (Round to the nearest whole number.)
d. How many years will it take for $51 to grow to $62.05 if
invested at 4 percent compounded annually?
_ years (Round to the nearest whole number.)
2 . (Present value) What is the present value of the following
future amounts?
a. $600 to be received 9 years from now discounted back to the
present at 9 percent.
b. $200 to be received 7 years from now discounted back to the
present at 7 percent.
c. $1,200 to be received 12 years from now discounted back to
the present at 5 percent.
d. $1,200 to be received 5 years from now discounted back to
the present at 17 percent.
a. What is the present value of $600 to be received 9 years from
now cliscounted back to the present at 9 percent?
$_ (Rou nd to the nearest cent.)
b. What is the present value of $200 to be received 7 years from
now discounted back to the present at 7 percent?
$_ (Round to the nearest cent.)

3. c. What is the present value of $1,200 to be received 12 years
from now discounted back to the present at 5 percent ?
$_ (Roun d to the nearest cent.)
d. What is the present value of $1,200 to be received 5 years
from now discounted back to the present at 17 percent?
$_ (Rou nd to the nearest cent.)
Page 3
3 . (Future value) Sarah Wiggum would like to make a single
lump-sum investment and have $ 1.9 million at the time of her
retirement in 26
years. She has found a mutual fund that expects to earn 4
percent annually. How much must Sarah invest today? If Sarah
earned an annual
return of 15 percent, how much must she invest today?
a. IfSarah can earn 4 percent annually for the next 26 years;
how much will she have to invest today?
$_ (Round to the nearest cent.)
b. If Sarah can earn 15 percent annually for the next 26 years,
how much will she have to invest today?
$_ (Round to the nearest cent.)

4. 4 . (Loan amortization ) Mr. Bill S. Preston, Esq., purchased a
new house for $ 160,000. He paid $20,000 down and agreed to
pay the rest over
the next 10 years in 10 equal end-of-year payments plus 7
percent compound interest on the unpaid balance. What will
these equal
payments be?
The equal payments wi ll be $_. (Round to the nearest cent.)
5 . ( Solving /or r of an annuity) You lend a friend $30,000,
which your friend will repay in 5 equal annual end-of-year
payments of $9,000, with
the first payment to be received 1 year from now. What rate of
return does your loan receive?
The rate ofreturn your loan will receive is _%. (Round to two
deci mal places.)
6. ( Complex present value) You would like to have $35,000 in
16 years. To accumulate this amount you plan to deposit each
year an equal sum in
the bank, which will earn 5 percent interest compounded
annually. Yom first payment will be made at the end of the
year.
a. How much must you deposit annually to accumulate late this

5. amount?
b. If you decide to make a large lump-sum deposit today instead
of the annual deposits, how large should this lump-sum deposit
be?
(Assume you can earn 5 percent on this deposit.)
c. At the end of 5 years you will receive $8,000 and deposit this
in the bank toward your goal of $35,000 at the end of 16 years.
In addition
to this deposit, how much must you deposit in equal annual
deposits to reach your goal? (Again answer you can earn 5
percent on this
deposit.)
a. How much must you deposit annually to accumulate $35,000
in 16 years?
$_ (Round to the nearest cent.)
b. If you decide to make a large lump-sum deposit today instead
of the annual deposits, how large should this lump-sum deposit
be?
(Assume you can earn 5 percent on this deposit.)
$_ (Round to the nearest cent.)
c. At the end of 5 years you will receive $8,000 and deposit this
in the bank toward your goal of $35,000 at the end of 16 years.
Inaddition to
this deposit, how much must you deposit in equal annual

6. deposits to reach your goal? (Again assume you can earn 5
percent on this deposit.)
$_ (Rou nd to the nearest cen t.)
Page 5
,,
7. Expected rate of return and risk) Carter Inc. is evaluating a
security. Calculate the investment's expected return and its
standard deviation.
PROBABILITY RETURN CJ
0.10 6%
0.40 9%
0.40 11%
0.10 16%
a. The investment's expected rate of return is _%. (Round to
two decima l p l aces)
b. The investment’s standard deviation is _%. (Round to two
decimal places)
8. (Holding-period returns) From the price data that follow,
compute the holding-period returns for pe1iods 2 through 4.

7. PERIOD
1
2
3
4
STOCK PRICE CJ
$13
16
10
17
The holding-period return i n period 2 for the stock is _%.
(Round to two deci mal places.)
The holding-period return in period 3 for the stock is _%.
(Round to two decimal places .)
The holding-period return in period 4 for the stock is _%.
(Roun d to two decimal places.)
9. (Capital asset pricing model) MFI Inc. has a beta of 1.89. If
the expected market return is 11.0 percent and the risk-free rate

8. is 7.0
percent, what is the appropriate required return of MFI (using
the CAPM)?Using the CAPM, the appropriate required return
of MFI is
____% (Rou nd to two decimal places.)
..
I O. Which rate of return is the risk-free rate? Why?
Securities
Nominal Average
Annual Returns
Standard Deviation
of Returns
Real Average
Annual Returns (*)
Risk
Premium
Large-company stocks 11.7% 20.0% 8.5% 8.0%

9. Small-company stocks 17.4% 33.0% 14.2% 13.7%
Corporate bonds 6.2% 8.5% 3.0% 2.5%
Government bonds 5.2% 5.7% 2.0% 1.5%
U.S. Treasury bills 3.7% 3.1% 0.5% 0.0%
Inflation 3.2% 4.3%
(*) The real return equals the nominal returns less the inflation
rate of 3.2 percent.
Which rate of return in the table is the risk-free rate? (Select
the best choice below.)
A. 6.2%
B. 3.7%
C. 1 1.7%
D. 17.4%
E. 5.2%
Treasury bills are risk-free assets because they have a short-
term maturity date, thei r price is less volatile, and there is no
chance of default on them.
True O R False

10. '· -· I,
Phil
325:
Philosophy
of
Sex
&
Love
Fall
2014
Prof.
Shlomo
Sher
Final
Paper
Your
paper
should

11. be
1000-­‐1500
words
Due
on
Titanium
by
December
16,
11:30
p.m.
(NO
LATE
PAPERS
WILL
BE
ACCEPTED.
NO
HARD
COPY
NEEDS
TO
BE
TURNED
IN)

12. The
Ultimate
Commitment:
“We’re
getting
the
Implants!”
We
all
want
love
in
our
lives.
However,
as
our
50%
divorce
rate
reminds
us,
even
when
love
seems
at

13. its
best,
things
can
quickly
fall
apart
–
and
much
else
falls
apart
when
love
is
over.
Imagine
the
possibility
of
committing
to
loving
someone
forever.
The
possibility
may
soon

14. be
available
to
all
of
us.
Consider
the
following:
A
matching
unique
pair
of
neural
implants
that
release
a
bonding
chemical
like
oxytocin
into
your
brains
when
you
and
your
partner
see

15. one
another.
The
“love
implants”
could
be
mutually
activated
(“turned
on”)
as
a
part
of
a
wedding
ceremony,
or
whenever
the
couple
determines
they
are
ready
for
the
“ultimate
commitment”.
A

16. year
waiting
period
from
the
time
of
application
would
help
ensure
that
the
lovers
are
indeed
ready
and
willing
for
this
kind
of
commitment.
Once
the
devices
are
turned
on,
there
is
no

17. turning
back
–
the
lover’s
attachment
system
will
form
an
ever-­‐
stronger
bond
with
the
other
person.
Your
paper
should
answer
the
following
questions,
giving
greater
weight
to
the
first
two

18. parts
which
engage
the
theories
discussed
in
our
class:
(i) Would
the
Love
Implant
interfere
with,
support,
or
be
inconsequential
for
romantic
love?
Explain
by
reference
to
at
least

19. 2
of
the
theorists
we
have
discussed
this
semester.
(ii) What
impact,
if
any,
is
getting
such
an
implant
likely
to
have
on
your
identity?
Reference
either
Rousseau
or

20. Nozick
(or
both)
in
your
answer.
(iii) Given
the
impact
such
a
device
would
likely
have
on
the
stability
of
families,
should
the
government
incentivize
its
use
in
any
way?
(e.g.

21. by
subsidizing
the
device
or
providing
a
tax
break
for
it)
Explain.
(iv) Under
what
conditions,
if
any,
would
you
consider
getting
implanted,
and
why?
Instructions:

22. • Answer
the
question
in
full
(each
and
every
part
and
in
that
order).
• When
explaining
your
own
view,
formulate
a
clear
thesis
and
support
it
with
specific
reasons
that
go
beyond
“it’s

23. seems
that
way
to
me”
or
“in
my
experience”.
Think
of
yourself
as
trying
to
convince
someone
who
disagrees
with
your
viewpoint.
• You
do
not
need
to
number
your
response
parts,
nor

24. separate
them
into
parts,
though
you
may
do
so
if
you
like.
Good
luck!