Bonds issued by state and county governments are called

Assignment Help Financial Management
Reference no: EM131510163

1. A graph depicting the linear relationship of the Yield to Maturity (%) of bonds and the Maturity (years) of bonds is called a(n):

a) Coupon rate b) Yield curve c) Interest rate trend d) Inversion

2  Normally, the YTM on long-term bonds is less than the YTM on short-term bonds.

a) True b) False

3. The contractual and unchanging interest rate paid on a bond is called:

a) The Yield to Maturity b) The Coupon rate c) The Market rate d) The EAR

4. Bonds issued by State and County governments are called:

a) Treasury Notes b) Tax-Free Bonds c) Municipal Bonds d) Corporate Bonds

5. Which of these types of bonds would be issued at the lowest price, assuming they all have the same par value and are issued on the same date?

a) “Plain Vanilla” bond b) Original Issue Discount Bond c) 0-Coupon bond

6. You own several bonds in a portfolio that includes corporate, U.S. Treasury, and Municipal bonds. If market interest rates were to decrease, then the value of your portfolio would:

a) Increase b) Decrease c) Remain the same

7. You have calculated the present value of a lump sum to be received in ‘t’ years using a discount rate of r. If the compounding period were to be quarterly rather than annual, you would have to modify your calculation by:

a) multiplying r x 4, dividing t / 4 b) multiplying t x 4, dividing r / 4 c) multiplying both t and r by 4 d) dividing both t and r by 4

8. The contract that documents all the rights and responsibilities of a bond’s issuer and its bond holders is called a(n):

a) Indenture b) Debenture c) Mortgage d) Prospectus

9. Bond Coupon Payments are equal to (face value x coupon rate)/ payments per year.

a) True b) False

10. The sensitivity of a bond’s value to changes in interest rates is called:

a) Liquidity risk b) Interest Rate risk c) Default risk d) Market Risk

Reference no: EM131510163

Questions Cloud

How you want to fund the expansion : At this point, you are not sure how you want to fund the expansion. You need to put together a business plan to develop a sense of the financial requirements.
Advocacy intervention strategies : Describe and justify at least two advocacy intervention strategies appropriate to your policy.
Adding a call provision-under normal conditions : Adding a call provision, under normal conditions, would be most likely to
Bonds issued by state and county governments are called : The sensitivity of a bond’s value to changes in interest rates is called: Bonds issued by State and County governments are called:
The constitutional safeguards : Write a paper identifying and evaluating the constitutional safeguards provided by the Fourth, Fifth, and Sixth.
Breastfeeding is inevitably the best for child development : Create the best case for their positions. Students thoroughly research the issue, then organize and frame logical, compelling, well-reasoned arguments.
Analyze the concept of patients rights : From the scenario, analyze the concept of patients' rights, and ascertain the key concerns of physicians and nurses as they apply to patients with AIDS
Enzymes are similar in structure and mechanism : Explain how it is that though these enzymes are similar in structure and mechanism, these enzymes differ strikingly in specificity.

Reviews

Write a Review

Financial Management Questions & Answers

  Opportunities and threats associated with business

Reflect upon the strengths, weaknesses, opportunities and threats associated with a business that you are familiar with (one you work at, one you completed your assignments on, or one you have just acquired knowledge about).

  The bonds make semiannual payments and have par value

Sqeekers Co. issued 13-year bonds a year ago at a coupon rate of 8.5 percent. The bonds make semiannual payments and have a par value of $1,000. If the YTM on these bonds is 6.8 percent, what is the current bond price?

  Costs and benefits of debt financing besides the tax shield

What are the other two costs and two benefits of debt financing besides the tax shield?

  Dollars in investment account and retirement account

Tim wants to have 257,897 dollars in his investment account in 7 years from today. He expects to earn a return of 9.57 percent per year in that account. Tim plans to make regular, equal savings contributions of X per year to his account for 7 years, ..

  External sources to fund the expected growth

Suppose that Wind Em Corp. currently has the balance sheet shown below, and that sales for the year just ended were $7.2 million. The firm also has a profit margin of 30 percent, a retention ratio of 20 percent, and expects sales of $8.2 million next..

  Suggest currency swap that would net financial intermediary

Company A, based in Switzerland, would like to borrow $10 million at a fixed rate of interest. Because the company is not well known, however, it has been unable to find a willing U.S. lender.

  Spot interest rates for maturities

Consider the following spot interest rates for maturities of one, two, three, and four years. r1 = 3.9% r2 = 4.5% r3 = 5.2% r4 = 6.0% Assuming a constant real interest rate of 2 percent, what are the approximate expected inflation rates for the next ..

  Present value of all future cash flows the assets

Simple Asset Situation The value of an asset whose value is based on expected future cash flows is determined by the present value of all future cash flows the assets will generate. Given the case scenario and target audience provided, select and dis..

  Sells a bond to the iron bank of bravos

Jaime sells a bond to the Iron Bank of Bravos for 18,000 golden crowns at an interest rate of 17%.  Twenty years later, the bank demands repayment in full. Since Jaime has never paid any interest, how much does Jaime owe?

  What is the discounted payback period if the discount rate

An investment project costs $10,000 and has annual cash flows of $2,960 for six years. What is the discounted payback period if the discount rate is zero percent? Discounted payback period years What is the discounted payback period if the discount r..

  What is the payback period for both projects

Siva, Inc., imposes a payback cutoff of three years for its international investment projects. Year 0, 1, 2, 3, 4 Cash Flow (A) -$68,000, $27,000, $36,000, $25,000, $12,000 Cash Flow (B) –$ 78,000, $19,000, $22,000, $34,000, $238,000. What is the pay..

  Percentage change in price of bond-semiannual payments

Both Bond Sam and Bond Dave have 7 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has five years to maturity, whereas Bond Dave has 20 years to maturity. If interest rates suddenly rise by 2 percent, what is the perc..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd