Finance Exam 2: Kahoot

Bond A matures in 10 years, has a coupon rate of 6%. If the market interest rate increases

The market price of the bond will decrease

Winston Co. had a dividend paying stock with a total return of -6.5%. Which must be true

The stock has a negative capital gains yield

An agent who arrange a transaction between a buyer and a seller of equity securities is called

A broker

Which bond is LEAST sensitive to interest rate risk

3 year-6% coupon

The interest rate that is most commonly quoted by a lender is the

Annual Percentage Rate

Mutually execulixive projects are best defined as competing projects that

Both require the total use of the same limited resource

A bond that can be paid off early at the issuer's discretion is what type of bond?

Callable

Which of the following is the rate at which a stocks price is expected to appreciate

Capital gains yield

You just received your semiannual payment on a bond. Which terms refer to this payment?

Coupon

The bond principal is repaid on which one of these dates

Maturity date

Which of the following will DECREASE the net present value of a project

Increasing the project's initial cost at time zero

Interest rates that INCLUDE an inflation premium and are "all in" are referred to as

Nominal Rates

A loan where the borrower receives $ today and repays a single lump sum on a future date is a

Pure Discount Loan

The Fisher effect is defined as the relationship between which of the following variables?

Real rates, inflation and nominal rates

The IRR% is defined as

The discount rate which causes the NPV=0

You cannot attend the shareholder's meeting so you authorize management to vote on your behalf

This is voting by proxy

Which of the following is true regarding interest rates?

When comparing loans with different compounding, use the EAR