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Midterm 1: ECON 173A - Financial Markets - Toda [FA21]
Midterm 1
Due Oct 15 at 7:20pm Points 10 Questions 10
Available Oct 14 at 7:20pm - Oct 15 at 7:20pm 1 day Time Limit 80 Minutes
Instructions
This quiz was locked Oct 15 at 7:20pm.
Attempt History
Attempt Time Score
LATEST Attempt 1 60 minutes 9 out of 10
 Correct answers are hidden.
Score for this quiz: 9 out of 10
Submitted Oct 15 at 5:36pm
This attempt took 60 minutes.
This is midterm 1. Please carefully read ExamInstruction.pdf and ExamProtocol.pdf for specific
instructions.
1 / 1 ptsQuestion 1
Suppose you withdraw $500 from an ATM using your credit card, which
has APR (annual percentage rate) 12%. If you pay back after 31 days,
how much do you owe? Round to the nearest cent.
505.1
1 / 1 ptsQuestion 2
Suppose that the monthly return of an asset is normally distributed with
expected return and volatility of 0.81% and 4.9%, respectively. What is
the 1% expected shortfall over a month (percentage point, round to first
decimal place)?
-12.3
1 / 1 ptsQuestion 3
Suppose that the monthly log return of the stock market index is
normally distributed with expected return and volatility of 0.0076 and
0.0655, respectively. If the risk-free rate is 1% (annual, continuously
compounded), what is the probability that the stock market index
underperforms the risk-free asset over a 10-year investment horizon
(percentage point, round to first decimal place)?
12.9
1 / 1 ptsQuestion 4
Suppose the annual (net) expected return and volatility of the stock
market index is 9.7% and 18.0%, respectively. If you invest in the stock
market index in the long run and returns are independent and identically
distributed across years, what would be the average growth rate of your
wealth (percentage point, continuously compounded, round to second
decimal place)?
8.08
1 / 1 ptsQuestion 5
Suppose a zero coupon bond with face value 100 and maturity 3
months trades at price 99.2280. What is the annual rate of return if you
hold this bond until maturity (percentage point, continuously
compounded, round to second decimal place)?
3.1
1 / 1 ptsQuestion 6
Consider a newly issued 10-year bond that makes semiannual coupon
payments. If the face value is 100, the coupon rate is 3%, and the
interest rate is constant at 4.29% (continuously compounded), what is
the fair price of the bond (round to first decimal place)?
89.2
1 / 1 ptsQuestion 7
Suppose you borrow $500,000 from a 15-year mortgage with APR
(annual percentage rate) 4.50%. If you decide to pay off the mortgage
after 8 years and 113 days, what is your payoff balance (round to
nearest 1,000 dollars)?
268,000
1 / 1 ptsQuestion 8
If you borrow $800,000 from a 15-year mortgage with APR (annual
percentage rate) 2.50%, what is the monthly payment (round to nearest
dollar)?
5,335
1 / 1 ptsQuestion 9
Consider a 20-year bond that makes semiannual coupon payments,
which was issued 2 years and 140 days ago. If the face value is 100,
the coupon rate is 6%, and the interest rate is constant at 3.80%
(continuously compounded), what is the fair price of the bond now
(round to first decimal place)?
129.8
0 / 1 ptsQuestion 10Incorrect
Consider a 10-year corporate bond that makes semiannual coupon
payments. If the face value is 100, the coupon rate is 3%, the bond
price is 96.897, and the yield on a similar Treasury bond is 1.87%
(continuously compounded), what is the yield spread (percentage point,
round to second decimal place)?
3.65