Has anyone used FinQuiz and taken their mocks? I just bought them today since I have done all the Kaplan exams and I feel like they are garbage. I have been scoring 72-80 on the Kaplan tests but just took a FinQuiz mock and got a 44. I always feel that harder is better because it really tests you but the material just seems really random and obscure, not even mentioning the fact that the sentances are so poorly written it is hard to read.
Am I actually hurting myself by taking time to do and review these tests? Does anyone have experience with their level one mocks?
This is one that I just don’t understand. I sat there trying to figure out what to use for N= to get the PV. Am I missing something? Where do you get 6?
Knin Inc. issued a 7% annual-coupon paying bond issue with a face value of $10 million on 1st January 2011 when the market interest rate was 7.7%. Using the effective interest rate method, the interest expense on bonds reported in 31 December 2012 is closest to: A. $700,000. B. $744,854. C. $748,308. Correct Answer: C The bonds were issued at a discount and sales proceeds were $9,673,432 (see below). Under the effective interest rate method, interest expense is calculated as: bonds’ carrying value x market interest rate. Sales proceeds (PV of bond issue): N= 6; I/Y = 7.7%; PMT = $700,000; FV = $10,000,000; CPT PV = - $9,673,432 Interest expense for the year ended 2011 is $9,673,432 x 7.7% = $744,854. Interest expense for the year ended 2012 is $9,718,286 x 7.7% = $748,308. Carrying value $9,718,286 in year 2012 is derived as {9,673,432 + ($744,854 - $700,000)}.
i thought effective int. you used the market interest rate at time of issuance
I think the question is incomplete. It failed to state the term of the bond!!!
Question doesn’t tell us that the term is 6 years… Bad question I guess.