fi 2
Stocks differ from bonds because:
all of the above
beta is
all the above
____ means that the percentage increase in dividends is the same each year
constant growth
the ____ is the regular intrest payment of a bond
coupon
When the ___ is less than the yield to maturity, the bond sells at a/the ___ the par value.
coupon rate, discount to
the terms ____ and _____ mean the same thing
diversifiable risk; unsystematic risk
the practice of not putting all your eggs in one basket is an illustration of
diversification
the holder of preferred stock is entitled to a constant dividend ____
every period
which of the statements is true
investors want to maximize return and minimize risk
A bond is a ________ instrument by which a borrower of funds agrees to pay back the funds with interest on specific dates in the future.
long term debt
a beta of 1.0 is the beta of the ___ while a beta of 0.0 is the measure for
market; risk free security
the ____ is the expiration date of the bond
maturity date
_____ has to do with the speed an accuracy of processing a buy or sell order at the best available price
operational efficiency
the value of a financial asset is the _____
present value of all of the future cash flows that will be received
zerio coupon bonds are
priced at a deep discount
the ____ is the market of first sale in which companies sell their authorized shares to the public
primary market
the _____ is the intercept of the security market line
risk free rate
in ____ current prices already reflect the price history and volume of the stock as well as all available public information
semi strong form efficient markets
junk bonds are a street name for _____ grade bonds
speculative
____ is risk that cannot be diversified away
systematic risk
which of the following investments is considered to be default risk free
treasury bills
in ___ current price reflect the price history and trading volume of the stock. it is of no use to chart historical stock prices to predict future stock prices such that you can identify mispriced stocks and routinely outperform the market.
weak form efficient markets
the _____ is the yield an individual would receive if the individual purchased bond today and held the bond to end of its life
yield to maturity