I. MULTIPLE CHOICE (10 points: 10 items x 1 point)
Encircle the letter of the correct answer.
1. C
2. B
3. B
4. D
5. C
6. C
7. D
8. A
9. C
10. B
II. CASE ANALYSES (15 points: 3 items x 5 points)
Read and analyze each given case and provide what is asked. Show your complete
solutions.
1. Theories in Setting Interest Rates
Migatsu Corporation wanted to borrow short-term funds from Maybank. As the Chief
Financial Officer (CFO) of the company, you wanted to know what should be the
one-year interest rate of a 2% investment if the company wanted to generate a
similar return to a two-year 5% investment.
Questions:
