Unit 2 - Questions

five percent XYZ debentures are trading for $1,250. other similarly rated bonds are being offered at 4.25%. what is the CY on the 5% XYZ debentures?

4.0%

According to the Standard & Poor's rating system, the 4 highest grades of bonds (from best to lowest grade) are

AAA, AA, A, BBB

a bond would be considered speculative below which of the following Moody's ratings?

Baa

one would expect to have checkbook access to a

DDA

a company realizes money from the sale of surplus equipment. it would like to invest this money but will need it again in 4-6 months and must take that into consideration when selecting an investment. you would recommend

Treasury bills

when a bond with a 6% coupon is selling for 90, each of the following statements is correct except

the bondholder will receive two semiannual interest payments of $27 each

which of the following statements about jumbo CDs is not correct?

they are secured by pledged assets of the issuing bank

which of the following have no interest rate risk

time deposits at your local bank

disregarding commissions, an investor selling a US Treasury bond for a price of 104:16 will receive

$1,045.00

which of the following statements regarding bond interest is true?

bond prices have an inverse relationship to interest rates

A 4.67% convertible debenture is selling at 102. It is convertible into the common stock of the same corporation at $25. The common stock is currently trading at $23. If the stock were trading at parity with the debenture, the price of the stock would be

$25.50