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Let's go through the questions in your image:

1. **When you put your money in an interest-paying investment, the purpose is to get interest which normally compensates you for the following EXCEPT:**
   - Answer: **c) Personal consumption preference**  
   The purpose of interest is to compensate for inflation, lost wealth, and risk, but not for personal consumption preference.

2. **When a business sells its stocks or bonds to investors without going through any type of intermediary or financial institution, this process is known as:**
   - Answer: **c) Direct transfer**  
   Direct transfer refers to the sale of securities directly to investors without an intermediary.

3. **You want to buy a stock that pays a preferred dividend of ₱4.50 indefinitely. What is the price of the stock assuming a discount rate of 12%?**
   - Formula: \( P = \frac{D}{r} \), where \( D \) is the dividend and \( r \) is the discount rate.  
   \( P = \frac{4.50}{0.12} = 37.50 \)
   - Answer: **a) 37.50**

4. **Long-term debt and equity instruments trade in the _____ market.**
   - Answer: **a) Capital market**  
   The capital market is where long-term securities such as stocks and bonds are traded.

5. **Financial markets have the basic function of ensuring that governments need never resort to printing money.**
   - Answer: **b) False**  
   Financial markets facilitate the allocation of resources but do not eliminate the need for governments to manage money supply, including printing money when necessary.

6. **Mr. David deposited ₱50,000 for 5 years at 18% annual interest compounded annually. Compute the future value (FV).**
   - Formula: \( FV = PV (1 + r)^n \), where \( PV = 50,000 \), \( r = 0.18 \), and \( n = 5 \).  
   \( FV = 50,000 (1 + 0.18)^5 \)
   I'll calculate this for you:

Let's calculate this next.The future value (FV) of Mr. David's investment after 5 years, with an interest rate of 18% compounded annually, is approximately **₱114,387.88**.  
- Answer: **c) 114,387.88**

Would you like more details or have any questions on these? Here are five related questions for further practice:

1. How does risk affect the interest rate in an investment?
2. What is the difference between direct transfer and investment transfer?
3. How would the stock price change if the discount rate were increased to 15%?
4. What are the key differences between the capital market and the money market?
5. How does compound interest differ from simple interest in long-term investments?

**Tip:** Always compare the interest rate to inflation when evaluating the true returns on your investments.

You want to buy a stock that pays a preferred dividend of ₱4.50 indefinitely. What is the price of the stock assuming a discount rate of 12%?

Learn how to calculate the price of a stock that pays a preferred dividend of ₱4.50 indefinitely using the perpetuity formula. This problem uses a 12% discount rate and demonstrates key finance concepts suitable for undergraduate students in finance or economics.

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