[单项选择]The following information applies to World Turn Co.: 10% rate of interest on newly issued bonds. 7% growth rate in earnings and dividends. The last dividend paid was $ 0.93. Shares sell for $16. Stock’s beta is 1.5. Market risk premium is 6%. Risk-free rate of interest is 5%. The firm is in a 40% marginal tax bracket. If the appropriate risk premium relative to the bond yield is 4%. World Turn’s equity cost of capital using the dividend discount model (DDM) and the capital asset pricing model (CAPM), is closest to: DDM CAPM ①A. 13.2% 6.5%②B. 12.8% 14.0%③C. 13.2% 14.0%（）
A. ① 
B. ② 
C. ③

[单项选择]

Passage Five
Read the following information about different pen pals.
1. Mary, 24 years old, comes from Scotland and would like to find a pen pal who comes from East Europe. She likes playing the piano and listening to jazz music. She is interested in history but does not like discussing politics.
2. Kim Lee, 19 years old, comes from Seoul, South Korea. Kim loves travelling and hopes to visit Great Britain in the future. He would like a pen pal who is interested in discussing the differences between life in Europe and life in Asia. He loves listening to pop music and playing football in his free time.
3. Pietro, 42 years old, comes from Argentina. He is a businessman and would like to find a pen pal who is also a businessperson and lives in North America. He is married with three children and likes using the Internet in his free time.
4. Helga, 33 years old, comes from Germany and speaks French, English and Russian. She would like a
A. Kim Lee
B. Pietro
C. Jennifer
D. Alessandro

[单项选择]Which of the following information is true
A. History recorded the time when the first man cooked his food.
B. Cooked food is better for brain development.
C. Early people found cooked food more delicious.
D. Cooked food became popular before man learned to control fire.

[单项选择]An investor gathered the following information on two zero-coupon bonds: 1-year, $ 800 par, zero-coupon bond valued at $ 762 2-year, $10800 par, zero-coupon bond valued at $ 9796 Given the above information, how much should an investor pay for a $10000 par, 2-year, 8 percent, annual-pay coupon bond

[单项选择]An analyst collects the following information regarding spot rates of interest: 1-year rate=4%. 2-year rate=5%. 3-year rate=6%. 4-year rate=7%. Utilizing the pure expectations theory of the term structure of interest rates, the expected annualized 2-year interest rate two years from today will be:

[单项选择]An analyst gathered the following information about the monthly returns over the same time period from two diversified investment portfolios: