Test 2 F302

speculative

"junk" bonds are a street name for ______ grade bonds

informational efficiency

____ refers to how quickly information is reflected in the available prices for trading

operational efficiency

_____ has to do with the speed and accuracy of processing a buy or sell order at the best available price

constant growth

______ means that the percentage increase in the dividend is the same each year

market, risk free security

a beta of 1.0 is the beta of the

long term debt

a bond is a ____ instrument by which a borrower of funds agrees to pay back the funds with interest on a specific date in the future

beta is

all of the above

unsystematic risk

can be diversified away

{E(rm)-rf}

if the equation e=rf+{E(rm)-rf]xi, is the linear equation for the security market line, what portion represents market risk premium fr stock that doesn't have beta of 1.0?

weak-form efficiency markets

in _____, current prices 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

all of the above

stocks differ from bonds because____

coupon rate

the ____ is the interest rate printed on the bond

yield to maturity

the ____ is the return the bond holder receives on the bond if held to maturity

maturity date

the _____ is the expiration date of the bond

coupon

the _____ is the regular interest payment of the bond

every period

the holder of a preferred stock is entiled to a constant dividend _____

diversification

the practice of not putting all your eggs in one basket an illustration of ____

diversifiable risk, unsystematic risk

the terms _____ and _____ mean the same thing

present value of future cash flows that will be received

the value of a financial asset is the _________

which of the following investments is considered to be default risk-free

treasury bills

$100

trials inc. has issued 30-year 1000 face value 10% annual coupon bonds with a yield to maturity of 9%. the annual interest payment for the bond is ____

coupon rate, discount to

when the ____ is less than the yield to maturity, the bond sells at a/the _____ the par value

investors want to maximize return and minimize risk

which of the below statements is true?

secondary market

you can think of the _____ as the "used stock" market because these shares have been owned or "used" previously

priced at a deep discount

zero-coupon bonds are