Reference no: EM132497802

Question 1: A semiannual corporate bond has a face value of $1,000, a yield to maturity of 6 percent, and a coupon rate of 4 percent. The bond matures 2 years from today. This bond:

A. pays interest payments of $40 every six months.

B. sells at par value.

C. is currently quoted at a price of 96.28.

D. has a current yield of 4 percent.

E. sells for $980.2

Question 2: The preferred stock of West Coast Limited pays an annual dividend of $4 and sells for $50 a share. What is the rate of return on this security?

A. 4 percent

B. 5 percent

C. 6 percent

D. 7 percent

E. 8 percent

Question 3: National Warehousing just announced it is increasing its annual dividend to $1 next year and establishing a policy whereby the dividend will increase by 2 percent annually thereafter. How much will one share of this stock be worth 3 years from now if the required rate of return is 10 percent?

A. $10.28 B. $12.15 C. $12.81 D. $13.27 E. $13.53

Question 4: Suppose a company had earnings per share of $2 over the past year. The industry average PE ratio is 15. Use this information to value this company's stock price.

A. $5 per share

B. $10

C. $20

D. $30

E. $35

Question 5: Market risk is measured by:

A. standard deviation.

B. beta.

C. Variance.

D. Mean return.

E. None of the above.