FINA exam #3
____ refers to how quickly info is reflected in the available prices for trading
Information efficiency
The ______ is the market of first sale in which companies first sell their authorized shares to the public
Primary Market
Which of the following are issued with the shortest time to maturity?
Treasury bills
When the ______ is less than the yield to maturity, the bond sells at a/the ______ the par value
coupon rate; discount
The ______ is the annual coupon payment divided by the current price of the bond and is not always an accurate indicator
current yield
Stocks are different from bonds because
stocks, unlike bonds, represent residual ownership
As the rating of a bond increases, it generally means
the credit rating increases, the default risk decreases, and the required rate of return decreases
The _____ is the yield an individual would receive if the individual purchased the bond today and held the bond to the end of its life
yield to maturity
The appropriate rate to use to discount the cash flows of a bond in order to determine the current price is the __________
yield to maturity