finance exam

your credit card company charges you 1.29 percent per month. what is the APR on your credit card

1.29*12 = 15.48

coupon rate

the annual coupon divided by the face value of a bond face value is also known as the MARKET PRICE.

EAR equation

EAR = (1 + r)^m - 1

which of the statements is true

all else equal, an increase in the discount rate decreases the present value and increases the future value of an annuity.

which one of the following types of securities has the lowest priority in a bankruptcy proceeding

common stock

bond ratings classify bonds based on

default risk only

The written agreement that contains the specific details related to a bond issue is called the bond:

indenture

When a bond's yield to maturity is less than the bond's coupon rate, the bond:

is selling at a premium

The Treasury yield curve plots the yields on Treasury notes and bonds relative to the ____ of those securities.

maturity

which one of the following features distinguishes an ordinary annuity from an annuity due

timing of the annuity payments

all else held constant, the present value of a bond increases when the

yield to maturity decreases