Beaumont Bearings is analyzing two mutually exclusive projects with the following cash flows. Its cost of capital is 9%.
The IRRs for the two projects are:

• A.X: 34.55%; Y: 27.87%
• B.X: 10.5%; Y: 12.9%
• C.X: 46.45%; Y: 54.85%

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Bond 1 is a 6%, 5-year bond, and Bond 2 is a 6%, 10-year bond. Both bonds yield 5%. What is the relative percentage of total future dollars that reinvestment income is expected to generate with Bond 1 and 2, respectively?

• A.2.70%; 9.42%
• B.3.37%; 15.03%
• C.12.03%; 27.72%

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Which one is the most likely reason for a current account deficit?

• A.low private savings.
• B.low private investment.
• C.government surplus.

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A student's grade in a course is determined by her score on two exams. The probability that she passes the first exam is 0.85, the probability that she passes the second exam is 0.80, and the probability that she passes both exams is 0.78. What is the probability that she passes at least one of the exams?

• A.0.05
• B.0.83
• C.0.87

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A GDP-weighted multi-market index is essentially a ______ index.

• A.price weighted.
• B.market-capitalization weighted.
• C.fundamentally weighted.

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