PF Ch. 11 Mult. Choice ?’s

Flashcard maker : Lily Taylor
D. Because investment objectives deal with the future, it is useless to make long-term goals.
Which of the following is NOT a true statement?
A. No one is going to make you save the money you need to start an investment program.
B. To be useful, investment objectives must be specific and measurable.
C. Investment goals must be tailored to the particular financial needs of the individual.
D. Because investment objectives deal with the future, it is useless to make long-term goals.
E. A long-term investment goal involves a time period of five years or more.
C. Accumulating $3000 in a savings account over the next 18 months.
A valid short-term investment goal is:
A. Saving $4000 per year for 40 years for retirement.
B. Spending less than $500 per month for housing.
C. Accumulating $3000 in a savings account over the next 18 months.
D. Using credit cards less in the next six months.
E. Purchasing a $250,000 life insurance policy within the next four years.
A. Saving $4000 per year for 40 years for retirement.
A valid long-term investment goal is:
A. Saving $4000 per year for 40 years for retirement.
B. Spending less than $500 per month for housing.
C. Accumulating $3000 in a savings account over the next 18 months.
D. Using credit cards less in the next six months.
E. Purchasing a $250,000 life insurance policy within the next four years.
B. Work to balance your budget.
Which of the following steps should be completed before starting an investment program?
A. Pick out at least two stocks or bonds to invest in.
B. Work to balance your budget.
C. Save at least $10,000 to invest.
D. Invest in certificates of deposit.
E. These all are completed at the same time.
D. Save at least $10,000 to invest.
Which of the following steps is NOT a factor to be considered before making your first investment?
A. Work to balance your budget.
B. Obtain adequate insurance protection.
C. Have access to other sources of cash for emergency needs.
D. Save at least $10,000 to invest.
E. Start an emergency fund.
B. Increase credit purchases and make installment payments in order to increase cash available for investing.
All of the following statements are considered to be good advice for the potential investor before starting his or her personal investment program except:
A. Work to balance your budget.
B. Increase credit purchases and make installment payments in order to increase cash available for investing.
C. Provide adequate insurance protection.
D. Start an emergency fund.
E. Establish a line of credit for emergency needs.
A. 20
good rule of thumb is to limit installment payments to ____________ percent of your net (after-tax) income.
A. 20
B. 30
C. 40
D. 50
E. 60
D. 10 years
How long will a bankruptcy stay on your credit report?
A. 1 year
B. 3 years
C. 7 years
D. 10 years
E. 12 years
D. 401(k) account
A _____________ is an employer-sponsored retirement account.
A. TRA account
B. 301(a) account
C. 509(re) account
D. 401(k) account
E. 321(a) account
B. A high rate of return will give you the highest total dollar return.
If you invest $4,000 per year over the next 40 years for retirement, which of the following is correct?
A. A low rate of return will give you the highest total dollar return.
B. A high rate of return will give you the highest total dollar return.
C. The rate of return doesn’t matter; your total dollar return will be the same with any investment.
D. We cannot compare the total dollar return for a low rate of return or a high rate of return.
E. Your investment will be worth $160,000 at retirement.
E. Commodities
Safe investments include all except:
A. Government bonds
B. Savings accounts
C. Certificates of deposit
D. Certain corporate bonds
E. Commodities
E. Commodities
Which of the following would be considered speculative investments?
A. Government bonds
B. Savings accounts
C. Certificates of deposit
D. Certain corporate bonds
E. Commodities
D. Savings accounts
Speculative investments include all except:
A. Options
B. Commodities
C. Precious stones
D. Savings accounts
E. Precious metals
D. Savings accounts
Which of the following would be considered a safe investment?
A. Options
B. Collectibles
C. Precious metals
D. Savings accounts
E. Commodities
C. They choose more conservative investments.
As people approach retirement, which of the following holds true for most?
A. They choose more speculative investments.
B. Their choices of investments do not change.
C. They choose more conservative investments.
D. They choose more risky investments.
E. They move all of their money into certificates of deposit.
C. They will choose more conservative investments.
Gwendolyn and Jack Francis are typical investors. As they approach retirement, which approach will they likely take?
A. They will choose more speculative investments.
B. Their choices of investments will not change.
C. They will choose more conservative investments.
D. They will choose more risky investments.
E. They will move all of their money into certificates of deposit.
A. Be directly related to the risk the investor assumes
The potential return on any investment should
A. Be directly related to the risk the investor assumes
B. Be inversely related to the risk of the investment
C. Not have any relationship to the risk of any investment
D. Be inversely related to the risk the investor assumes
E. Be guaranteed
E. Stock
Which of the following is NOT one of the four components of risk to be considered when evaluating investments?
A. Business failure
B. Inflation
C. Interest rate
D. Market
E. Stock
C. Inflation, interest rate, business failure, market
When choosing an investment, one should consider risk. The four primary risk components are:
A. Business failure, inflation, buying power, stock
B. Buying power, inflation, interest rate, market
C. Inflation, interest rate, business failure, market
D. Market, bond, stock, inflation
E. Stock, interest rate, market, buying power
A. Inflation
Which of the following risks reduces your buying power?
A. Inflation
B. Interest rate
C. Business failure
D. Market
E. Stock
B. Interest rate
Which of the following risks associated with preferred stocks or government or corporate bonds is a result of changes in rates in the economy?
A. Inflation
B. Interest rate
C. Business failure
D. Market
E. Stock
C. Business failure
Which of the following risks deals with the possibility that bad management, unsuccessful products, or other factors will cause the firm to be less profitable than originally anticipated?
A. Inflation
B. Interest rate
C. Business failure
D. Market
E. Stock
D. Market
Which of the following risks deals with fluctuations due to political or social conditions?
A. Inflation
B. Interest rate
C. Business failure
D. Market
E. Stock
A. A reduction in buying power
Inflation risk deals with
A. A reduction in buying power
B. Changes in interest rates
C. Bad management and/or unsuccessful products
D. Political or social conditions
E. Predictable sources of income
C. Bad management and/or unsuccessful products
Business failure risk can be due to:
A. A reduction in buying power
B. Changes in interest rates
C. Bad management and/or unsuccessful products
D. Political or social conditions
E. Predictable sources of income
D. Political or social conditions
Market risk is associated with fluctuations in the market due to
A. A reduction in buying power
B. Changes in interest rates
C. Bad management and/or unsuccessful products
D. Political or social conditions
E. Predictable sources of income
D. All of the above can affect business failure risk
All of the following can be factors that influence business failure risk except:
A. Bad management
B. Unsuccessful products
C. Competition
D. All of the above can affect business failure risk
E. None of the above can affect business failure risk
E. Leads to lower profitability than anticipated
Business failure risk:
A. Cannot be diversified
B. Causes the business to increase its dividends
C. In the worst case, leads to improved earnings
D. Is associated with government bonds
E. Leads to lower profitability than anticipated
D. Buy shares in a mutual fund that does not have stock in XYZWidgets.com.
Timothy Calibe owns common stock in XYZWidgets.com. To reduce his business failure risk, he should
A. Buy more common stock in XYZWidgets.com.
B. Buy preferred stock in XYZWidgets.com.
C. Buy bonds in XYZWidgets.com.
D. Buy shares in a mutual fund that does not have stock in XYZWidgets.com.
E. Any of the above would reduce his business failure risk.
E. “Growth” common stock
If your primary investment objective is to receive income, which of the following would NOT be appropriate for your portfolio?
A. Passbook savings account
B. Certificate of deposit
C. Municipal bond
D. Preferred stock
E. “Growth” common stock
B. Earnings are reinvested in the company for future growth
Which of the following describes a growth company?
A. The company pays a large dividend
B. Earnings are reinvested in the company for future growth
C. The company isn’t growing as fast as in the past
D. The company invests most of its money in safe securities like government bonds
E. The company provides a predictable source of income for investors
A. The company pays a large dividend
Which of the following does NOT describe a growth company?
A. The company pays a large dividend
B. Earnings are reinvested in the company for future growth
C. Earnings potential is high
D. Managers can solve problems associated with rapid expansion
E. Sales revenue is increasing
B. Growth
If your main focus is to have your investments increase in value, you are most concerned with
A. Income
B. Growth
C. Liquidity
D. Business failure risk
E. Market risk
C. Liquidity
If your main focus is to be able to buy or sell an investment quickly without substantially affecting the investment’s value, you are most concerned with
A. Income
B. Growth
C. Liquidity
D. Business failure risk
E. Market risk
C. Interest-bearing checking account
Which of the following investments is the most liquid?
A. Certificate of deposit
B. Corporate bond
C. Interest-bearing checking account
D. Municipal bond
E. Preferred stock
A. Asset allocation
The process of spreading your assets among several different types of investments to lessen risk is called
A. Asset allocation
B. Asset combination
C. Asset investments
D. Asset riskiness
E. Asset returns
E. Don’t put all of your eggs in one basket
A proverb that we can associate with diversifying our investments is:
A. A bird in the hand is worth two in the bush
B. A stitch in time saves nine
C. Birds of a feather flock together
D. Don’t judge a book by its cover
E. Don’t put all of your eggs in one basket
B. An unemployed, single parent who just received a $300,000 divorce settlement
Which of the following investors would mostly prefer income investments over growth investments?
A. A 25-year old single investor with a job that pays $60,000 per year
B. An unemployed, single parent who just received a $300,000 divorce settlement
C. A 30-year old who has a separate trust fund for day-to-day expenses
D. A dual career couple in their 30s whose combined income is $95,000
E. A healthy 45-year old who plans to work in his secure job for at least 25 more years
D. A dual career couple in their 30s whose combined income is $95,000
Which of the following investors would mostly prefer growth investments over income investments?
A. A 25-year old single investor who does not have an emergency fund
B. An unemployed, single parent who just received a $300,000 divorce settlement
C. A 70-year old who uses his dividends and interest to pay his monthly bills
D. A dual career couple in their 30s whose combined income is $95,000
E. A retired couple with $850,000 in retirement savings
E. Stocks
Which of the following investments typically has the largest potential investment return?
A. Bonds
B. Cash
C. Cash equivalents
D. Certificates of deposit
E. Stocks
E. Very aggressive
A portfolio that is 100 percent invested in stock would be indicative of a(n) _____ portfolio.
A. Aggressive
B. Bond
C. Cash
D. Conservative
E. Very aggressive
E. Stocks
Which of the following investments typically has the most risk?
A. Bonds
B. Cash
C. Cash equivalents
D. Certificates of deposit
E. Stocks
E. Very aggressive
A portfolio that is 100 percent invested in stock would be indicative of a(n) _____ portfolio.
A. Aggressive
B. Bond
C. Cash
D. Conservative
E. Very aggressive
D. Conservative
A portfolio that has 15 – 20 percent invested in stock would be indicative of a(n) _____ portfolio.
A. Aggressive
B. Bond
C. Cash
D. Conservative
E. Very aggressive
E. Stocks
Which of the following would you expect to earn just over 10 percent per year over the long term?
A. Bonds
B. Certificates of deposit
C. Conservative portfolio
D. Savings account
E. Stocks
E. Stocks and mutual funds
If you need access to your funds in less than one year, which of the following investments would be least appropriate?
A. Cash
B. Certificates of deposit
C. Short-term government bonds
D. Corporate bonds
E. Stocks and mutual funds
E. Stocks and mutual funds
If you can leave your funds alone for 5 – 10 years or more, which of the following investments would be most appropriate?
A. Cash
B. Certificates of deposit
C. Short-term government bonds
D. Corporate bonds
E. Stocks and mutual funds
D. Conservative
As investors approach retirement age, they are often more interested in ______ portfolios.
A. Aggressive
B. International
C. Cash
D. Conservative
E. Growth-oriented
A. Aggressive
Young investors are often more interested in ______ portfolios than older investors.
A. Aggressive
B. Government bond
C. Cash
D. Conservative
E. Safe mutual fund
D. 110
Some financial experts, such as Suze Orman, suggest that investors include a percentage of growth investments as part of their portfolio. This can be calculated by subtracting your age from:
A. 50
B. 95
C. 100
D. 110
E. 200
B. Let the investments manage themselves
When investing, an investor should NOT
A. Evaluate potential investments
B. Let the investments manage themselves
C. Monitor the value of investments
D. Keep accurate records
E. Consider tax consequences of selling investments
B. Monitor its value
After you purchase an investment, you should
A. Assume that your investment is tax-free
B. Monitor its value
C. Ignore other potential investments
D. Leave recordkeeping to the financial advisor
E. Let the investment manage itself
D. Determine their values using the Internet or newspapers
When considering the value of your stock investments, it is important to
A. Wait until you sell them to determine their value
B. Track the prices in the December copy of a financial magazine
C. Estimate their values based on similar stocks
D. Determine their values using the Internet or newspapers
E. Assume that the values remain the same as long as you hold them
E. Identify original cost after you sell the investment.
To maximize profit or reduce dollar losses when you sell your investments, it is important to do all of the following except:
A. Keep purchase records.
B. Monitor current values.
C. Identify commissions or fees paid.
D. Keep a list of sources of information (such as Internet addresses) for reference.
E. Identify original cost after you sell the investment.
D. Both A and B are correct
When should you consider the tax consequences of selling your investments?
A. When you make your own decisions
B. When you have professional help
C. When the taxes due are less than $300 per transaction
D. Both A and B are correct
E. Both B and C are correct
D. Treasury stock
Which of the following is NOT a U.S. Treasury security?
A. Treasury note
B. Treasury bond
C. Treasury Inflation-Protected Securities (TIPS)
D. Treasury stock
E. Treasury bill
B. Less than the face value
A discounted security means that the current price is trading at
A. The face value
B. Less than the face value
C. Greater than the face value
D. The value at maturity
E. The expected interest rate
D. Individual investors who purchase treasury bills, notes, and bonds must hold the investments until maturity.
Which of the following statements is false?
A. The federal government sells bonds and securities to obtain financing.
B. U.S. government Treasury securities carry a reduced risk of default when compared to corporate securities.
C. U.S. Treasury securities offer lower interest rates than corporate bonds.
D. Individual investors who purchase treasury bills, notes, and bonds must hold the investments until maturity.
E. Treasury securities may be purchased through banks or brokers.
B. treasury bill.
A government security issued in minimum units of $100 with 4, 13, 26, or 52-week maturities is called a
A. subordinated bond.
B. treasury bill.
C. treasury note.
D. treasury bond.
E. savings bond.
B. Treasury bills < treasury notes < treasury bonds
When comparing the interest rates for government securities, which of the following is correct?
A. Treasury bonds < treasury bills < treasury notes B. Treasury bills < treasury notes < treasury bonds C. Treasury notes < treasury bills < treasury bonds D. Treasury bills < treasury bonds < treasury notes E. Treasury bonds < treasury notes < treasury bills
C. treasury note.
A government security issued in $100 units with maturities of more than one year but not more than ten years is called a
A. subordinated bond.
B. treasury bill.
C. treasury note.
D. treasury bond.
E. savings bond.
D. treasury bond.
A government security issued in minimum units of $100 with a 30-year maturity is called a
A. subordinated bond.
B. treasury bill.
C. treasury note.
D. treasury bond.
E. savings bond.
B. TIPS.
A security issued by the U.S. Treasury that protects the investor from inflation is called a
A. treasury bill.
B. TIPS.
C. SAFE.
D. Treasury Bond.
E. Treasury Bill.
D. general obligation
A bond backed by the full faith, credit, and unlimited taxing power of the government that issued it is called a ____________ bond.
A. debenture
B. mortgage
C. secured
D. general obligation
E. revenue
C. revenue bond.
A bond that is repaid from the income generated by the project it is designed to finance is called a(n)
A. treasury bill.
B. savings bond.
C. revenue bond.
D. general obligation bond.
E. agency bond.
B. Municipal bond
A debt security issued by a state or local government is known as a
A. Treasury bond
B. Municipal bond
C. Corporate bond
D. Subordinated bond
E. Federal agency bond
A. Interest may be tax-exempt at the federal level
Which of the following features is a benefit for investors of municipal bonds?
A. Interest may be tax-exempt at the federal level
B. Interest may be tax-deductible at the federal level
C. Face value may be tax-deducible at the state level
D. Face value may be a tax-credit at the federal level
E. All payments are tax-deductible at all governmental levels
C. Tax-exempt yield and the investor’s tax rate
The taxable equivalent yield for a municipal bond is calculated using
A. The investor’s tax rate and treasury bill yield
B. Tax-exempt yield and current inflation rate
C. Tax-exempt yield and the investor’s tax rate
D. Current inflation rate and number of years until maturity
E. Tax-exempt yield and number of years until maturity
E. The tax exempt yield is primarily associated with federal government securities
Which of the following is NOT correct?
A. The taxable equivalent yield is greater than the tax-exempt yield
B. The taxable equivalent yield can be compared to the return on a taxable investment
C. An investor can have a capital gain if he sells a municipal bond before maturity
D. The taxable equivalent yield is calculated for municipal securities
E. The tax exempt yield is primarily associated with federal government securities
C. six months.
Generally, interest on corporate bonds is paid every
A. month.
B. three months.
C. six months.
D. nine months.
E. year.
D. All of the above are correct
Corporations use bonds for
A. Financing the ongoing business activities
B. When it is difficult to sell stock
C. To improve financial leverage
D. All of the above are correct
E. None of the above are correct
B. Tax deductible for the corporation
Interest paid to corporate bond-holders is
A. Tax deductible for the investor
B. Tax deductible for the corporation
C. Tax-exempt for the investor
D. Tax-exempt for the corporation
E. Tax deductible for both the investor and the corporation
E. trustee.
The financially independent firm or individual that acts as the bondholders’ representative is the
A. chairman of the board.
B. president of the corporation.
C. debenture holder.
D. indenture holder.
E. trustee.
C. Bonds are a form of debt financing.
Which of the following statements is correct?
A. For the corporation, interest paid on corporate bonds is not tax deductible.
B. Bond financing is seldom used to pay for major corporate purchases.
C. Bonds are a form of debt financing.
D. Bonds do not have to be repaid at maturity.
E. Interest payments to bondholders are at the discretion of the corporation.
A. debenture
A bond that is backed only by the reputation of the issuing corporation is called a(n) ____________ bond.
A. debenture
B. mortgage
C. indenture
D. preemptive
E. treasury
B. mortgage
A corporate bond that is secured by various assets of the issuing firm is called a(n) ____________ bond.
A. debenture
B. mortgage
C. indenture
D. preemptive
E. treasury
D. convertible
A bond that can be exchanged, at the owner’s option, for a specified number of shares of the corporation’s stock is called a(n) ____________ bond.
A. debenture
B. mortgage
C. indenture
D. convertible
E. subordinated
D. In reality, there is no guarantee that bondholders will convert to common stock even if the market value of the common stock does increase in value.
Which of the following statements is true?
A. Convertible corporate bonds are more secure than government bonds.
B. Convertible bonds often pay 1 to 2 percent more interest than nonconvertible bonds.
C. Because of the conversion feature, it is not necessary to evaluate convertible, corporate bonds.
D. In reality, there is no guarantee that bondholders will convert to common stock even if the market value of the common stock does increase in value.
E. Even after convertible bondholders convert their investment to common stock, the bondholders still receive interest payments.
C. allows the corporation to buy outstanding bonds from current bondholders before the maturity date.
A call feature
A. allows bondholders to convert their bonds to a specified number of shares of common stock.
B. is not available for corporate bonds.
C. allows the corporation to buy outstanding bonds from current bondholders before the maturity date.
D. is only available with government securities.
E. is guaranteed by the corporation.
B. sinking
A fund to which annual or semiannual deposits are made for the purpose of redeeming a bond issue is called a(n) ____________ fund.
A. serial
B. sinking
C. debenture
D. indenture
E. money
E. serial
Bonds of a single issue that mature on different dates are called ____________ bonds.
A. debenture
B. mortgage
C. sinking fund
D. subordinate
E. serial
B. Bond Rating Corporation.
Which of the following is NOT a rating agency for bonds?
A. Moody’s Investors Service.
B. Bond Rating Corporation.
C. Standard & Poor’s Corporation.
D. Fitch Ratings Service.
E. Mergent, Inc.
B. Are an indirect way of owning bonds issued by the governments and corporations.
Bond funds
A. Allow investors to purchase individual corporate bonds.
B. Are an indirect way of owning bonds issued by the governments and corporations.
C. Are not as diversified as individual bond purchases.
D. Do not have professional management because they do not include stocks in the funds.
E. Should be the primary investment for investors who have a very aggressive portfolio.
E. B & C are correct
Why do investors purchase corporate bonds?
A. Dividend income
B. Repayment at maturity
C. Possible increase in value
D. A & B are correct
E. B & C are correct
B. Registered bond
The type of bond that is tracked electronically by the issuing company is a
A. General obligation bond
B. Registered bond
C. Revenue bond
D. Tax-exempt bond
E. Zero-coupon bond
E. zero-coupon
John Peterson purchased a bond at a price far below its face value, which makes no interest payments, and will be redeemed at its face value at maturity. In all likelihood, he purchased a(n) ____________ bond.
A. debenture
B. convertible
C. indenture
D. registered
E. zero-coupon
B. Every year as it is earned
The IRS requires that an investor in a zero-coupon bond report interest
A. Only in the first year
B. Every year as it is earned
C. When it is received
D. At maturity
E. Never since it is a zero-coupon
B. decrease in value.
If overall interest rates in the economy rise, a corporate bond with a fixed interest rate will generally
A. increase in value.
B. decrease in value.
C. remain unchanged.
D. become worthless.
E. be returned to the corporation.
C. Corporate bonds
Which of the following securities are rated at various agencies?
A. Treasury bills
B. Treasury notes
C. Corporate bonds
D. Treasury bonds
E. TIPS
D. $6,600
If your monthly expenses total $2,200, you should save at least _______ in an emergency fund before focusing completely on your investment portfolio.
A. $1,000
B. $2,200
C. $4,400
D. $6,600
E. $10,000
F. $26,400
D. $7,800
If your monthly expenses total $2,600 you should save at least _______ in an emergency fund before focusing completely on your investment portfolio.
A. $1,000
B. $2,600
C. $5,200
D. $7,800
E. $10,000
F. $31,200
D. 80 percent
According to some financial experts like Suze Orman, how much of an investment portfolio should a 30-year old have in growth investments?
A. 30 percent
B. 65 percent
C. 70 percent
D. 80 percent
E. 100 percent
A. 20 percent
According to some financial experts like Suze Orman, how much of an investment portfolio should a 30-year old have in safe (non-growth) investments?
A. 20 percent
B. 30 percent
C. 70 percent
D. 80 percent
E. 100 percent
D. 60 percent
According to some financial experts like Suze Orman, how much of an investment portfolio should a 50-year old have in growth investments?
A. 30 percent
B. 40 percent
C. 50 percent
D. 60 percent
E. 70 percent
B. 40 percent
According to some financial experts like Suze Orman, how much of an investment portfolio should a 50-year old invest in safe (non-growth) investments?
A. 30 percent
B. 40 percent
C. 50 percent
D. 60 percent
E. 70 percent
E. 6.0 percent
You are considering an investment in a municipal bond that has a yield of 4.5 percent. Your tax rate is 25 percent. What is your taxable equivalent yield?
A. 1.125 percent
B. 3.375 percent
C. 4.5 percent
D. 5.625 percent
E. 6.0 percent
E. 6.9 percent
You are considering an investment in a municipal bond that has a yield of 5.2 percent. Your tax rate is 25 percent. What is your taxable equivalent yield?
A. 1.3 percent
B. 3.9 percent
C. 5.2 percent
D. 6.5 percent
E. 6.9 percent
D. $62.50
Assume that you purchase a $1,000 bond issued by GE that pays 6 ¼ percent interest each year. What is the annual interest amount?
A. $6.25
B. $62.25
C. $62.40
D. $62.50
E. $1000
C. $35.00
Assume that you purchase a $1,000 bond issued by Harley-Davidson that pays 7 percent interest each year, paid semiannually. What is the amount of each interest payment?
A. $3.50
B. $7.00
C. $35.00
D. $70.00
E. $1000
C. $45.00
Assume that you purchase a $1,000 bond issued by Kohls that pays 9 percent interest each year, paid semiannually. What is the amount of each interest payment?
A. $4.50
B. $9.00
C. $45.00
D. $90.00
E. $1000
D. $1500
What is the approximate market value of a bond that pays $60 interest each year if interest rates have dropped to 4 percent?
A. $400
B. $600
C. $1000
D. $1500
E. $2400
C. $920
If a bond is quoted in the newspaper at 92, what is its price?
A. $9.20
B. $92
C. $920
D. $1,000
E. $1,092
E. $1,020
If a bond is quoted in the newspaper at 102, what is its price?
A. $1.02
B. $10.20
C. $102.00
D. $1,000
E. $1,020
E. 13.3 percent
Gwendolyn Francis is interested in buying a bond that pays $80 annually. The current price of the bond is $600. What is her current yield?
A. 6 percent
B. 7.5 percent
C. 8 percent
D. 12 percent
E. 13.3 percent

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