Fin

The actual interest rate on a loan that is compounded monthly but expressed as an annual rate is referred to as the _____ rate. Multiple Choice effective annual discounted annual periodic monthly stated consolidated monthly

effective annual

A "fallen angel" is a bond that has moved from: Multiple Choice investment grade to speculative grade. being a long-term obligation to being a short-term obligation. being a premium bond to being a discount bond. being publicly traded to being privately traded. senior status to junior status for liquidation purposes.

investment grade to speculative grade.

A bond's principal is repaid on the ________ date. Multiple Choice coupon dirty maturity clean yield

maturity

The owner of a trading license for the nyse is called member specialist broker agent dealer

member

A bond that has only one payment, which occurs at maturity, defines which one of these types of bonds? Multiple Choice Zero coupon Floating-rate Callable Debenture Junk

Zero coupon

Today, Hannah paid a total of $1,176, including accrued interest, to purchase a 20-year bond that has 6 years left until maturity. This price is referred to as the: Multiple Choice quoted price. call price. dirty price. spread price. clean price.

dirty price.

What are the distributions of either cash or stock to shareholders called? coupon payments capital payments dividends Retained earnings Diluted profits

dividends

Which one of the following is the price at which a dealer will sell a bond? Multiple Choice Call price Bid price Bid-ask spread Asked price Par value

Asked price

Chavez & Hwang just issued 15-year, 6.4 percent, unsecured bonds at par. These bonds fit the definition of which one of the following terms? Multiple Choice Discounted Note Zero coupon Callable Debenture

Debenture

A $1,000 par value corporate bond that pays $45 annually in interest was issued last year. Which one of these would apply to this bond today if the current price of the bond is $989.42? Multiple Choice The current yield exceeds the yield to maturity. The current yield exceeds the coupon rate. The bond is selling at par value. The bond is currently selling at a premium. The coupon rate has increased to 7 percent.

The current yield exceeds the coupon rate.

All else constant, a bond will sell at _____ when the coupon rate is _____ the yield to maturity. a premium; less than a discount; higher than a premium; equal to a discount; less than par; less than

a discount; less than

The interest rate that is most commonly quoted by a lender is referred to as the: Multiple Choice common rate. annual percentage range compound rate. simple rate. effective annual rate.

annual percentage rate.

A bond that is payable to whomever has physical possession of the bond is said to be in: Multiple Choice debenture status. registered form. collateral status. new-issue condition. bearer form.

bearer form.

which one of the following is the rate at which a stocks price is expected to appreciate total return capital gains yield dividend yield coupon rate current yield

capital gains yield

Ana just received the semiannual payment of $35 on a bond she owns. This is called the ______ payment. Multiple Choice coupon yield call premium face value discount

coupon

which one of these statements relating to preferred stock is correct Preferred shareholders determine the outcome of any election that involves a proxy fight preferred shareholders normally receive one vote per share owned preferred stock usually has a stated liquidating value of 1000 per share preferred shareholders are considered to be the residential owners of the corporation cumulative preferred shares are more valuable then comparable noncumulative shares

cumulative preferred shares are more valuable then comparable noncumulative shares

An ordinary annuity is best defined as: Multiple Choice equal payments paid at the beginning of regular intervals for a limited time period. equal payments that occur at set intervals for an unlimited period of time. increasing payments paid for a definitive period of time. increasing payments paid forever. equal payments paid at the end of regular intervals over a stated time period.

equal payments paid at the end of regular intervals over a stated time period.

Dilan owns a bond that will pay him $45 each year in interest plus $1,000 as a principal payment at maturity. The $1,000 is referred to as the: Multiple Choice discount. coupon. yield. dirty price. face value.

face value.

A highly illiquid bond that pays no interest but might entitle its holder to rental income from an asset is most apt to be a: Multiple Choice contingent callable bond. convertible bond. structured note. sukuk. put bond.

sukuk

Protective covenants: Multiple Choice apply to short-term debt issues but not to long-term debt issues. only apply to bonds that have a deferred call provision. are a feature found only in government-issued bond indentures. only apply to privately issued bonds. are primarily designed to protect bondholders.

are primarily designed to protect bondholders.

An agent who arranges a transaction between a buyer and a seller of equity securities is called a dealer floor trader capitalist broker principal

broker

A call-protected bond is a bond that: Multiple Choice cannot be called during a given period of time. is currently being called. is guaranteed to be called. is callable at any time. can never be called.

cannot be called during a given period of time.

A person on the floor of the nyse who executes buy and sell orders on behalf of customers is call a specialist floor brokers designated market maker dealer supplemental liquidity provider

floor broker

which one of the following represents the capital gains yield as used in the dividend growth model g/Po Po d1/Po g g1

g1

when using the two stage dividend growth model g1 cannot be negative pt=Dt/R R must must be less then g1 but greater then g2 g1 can be greater the R g1 must be greater then g2

g1 can be greater the R

An amortized loan: Multiple Choice may have equal or increasing amounts applied to the principal from each loan payment. requires that all interest be repaid on a monthly basis while the principal is repaid at the end of the loan term. requires the principal amount to be repaid in even increments over the life of the loan. repays both the principal and the interest in one lump sum at the end of the loan term. requires that all payments be equal in amount and include both principal and interest.

may have equal or increasing amounts applied to the principal from each loan payment.

A perpetuity is defined as: Multiple Choice -unending equal payments paid at equal time intervals. -varying amounts that are paid at even intervals forever. -a limited number of equal payments paid in even time increments. -unending equal payments paid at either equal or unequal time intervals. -payments of equal amounts that are paid irregularly but indefinitely.

unending equal payments paid at equal time intervals.

you cannot attend the shareholders meeting so you get another shareholder to vote for you what is this called voting by proxy alternative voting cumulative voting straight voting

voting by proxy

The bond market requires a return of 6.2 percent on the 15-year bonds issued by Mingwei Manufacturing. The 6.2 percent is referred to as the: Multiple Choice call rate. yield to maturity. face rate. current yield. coupon rate.

yield to maturity.