1. At any given time, the yield curve is affected by all of the following EXCEPT
A. inflationary expectations.;
B. the approximate yield formula.;
C. short- and long-term supply and demand conditions.
D. liquidity preferences.;
2. Using the present-value method, all of the following are needed to value a bond EXCEPT
A. the issue's bond rating.
B. the par value.;
C. the number of years until maturity.;
D. the annual coupon payment.;
3. What is the current yield of a $10,000 bond bearing a 14% coupon rate and having a current market price of 95?
A. 14.74%;
B. 15.36%;
C. 14.00%;
D. insufficient information is provided.
4. The rate of return which indicates the return an investor can expect to earn by holding a bond over a period of time that is less than the life of the issue is known as
A. bond equivalent yield (BEY)
B. expected return;
C. yield-to-maturity;
D. promised yield;
1. The main purpose of a bond ladder is to
A. achieve the highest level of capital gains possible.;
B. maintain a highly liquid portfolio.;
C. less the impact of swings in interest rates.;
D. offset the effects of bond duration.
2. A corporation that wants to raise funds but that does not want to issue debt or dilute its EPS will most likely
A. issue preferred stock.;
B. execute a stock split.;
C. issue convertible debentures.;
D. execute a reverse stock split.
3. Preferred stock investors are primarily subject to two types of risk. These two primary types of risk are
A. interest rate and business risk.;
B. event risk and liquidity.;
C. purchasing power risk and liquidity risk.;
D. financial risk and event risk.
4. When issuing preferred stock, the issuing company typically agrees that it will pay preferred stockholders
A. a dividend that is a certain percentage higher than the dividend payable to common stockholders.;
B. the dividend payable to common stockholders, plus a special conversion bonus.
C. a fixed level of semi-annual dividends, and that such payment are to be paid only if dividends are also paid to common stockholders.
D. a fixed level of quarterly dividends, and that such payments will take priority over common stock dividends.
1. A share of preferred with a $100 par value, which pays a 12% dividend, should have a current price of _____ when the dividend yield is 10%?
A. $100
B. $12;
C. $83;
D. $120
2. Convertible bonds can generally be converted into
A. share of the issuing company's common stock.;
B. parcels of mortgage pass-through certificates.
C. additional shares of debenture bonds.
D. shares of the issuing company's preferred stock.;
3. A convertible bond has a par value of $1000 and a conversion price of $74. How many shares can the bondholder receive in exchange for the bond?
A. 11.2 shares;
B. 9.8 shares;
C. 13.5 shares.
D. 7.4 shares;
4. Which of the following statements about conversion premiums is (are) correct?1. Conversion premiums often amount to as much as 25 to 30% or more of an issue's true conversion value.2. Conversion premiums tend to fade away as the price of the convertible goes up.
A. 1 only;
B. 2 only;
C. Both 1 and 2;
D. Neither 1 or 2.
1. Neo, Here is the exam as follows:
The Financial Accounting Standards Board (FASB) is responsible for establishing:
a. the American Institute of Certified Public Accountants
b. generally accepted accounting principles
c. the code of professional conduct for accountants
d. the Securities and Exchange Commission
2. An entity where ownership is divided into shares of stock is called a:
a. proprietorship
b. trade agreement
c. corporation
d. mutual agency
3.According to the FASB, the primary objective of financial reporting is to provide information:
a. to the Internal Revenue Service
b. to the Securities and Exchange Commission
c. useful for making investing and lending decisions
d. regarding the revenues and expenses of a business
4.The principle which states that assets acquired by the business should be recorded at their exchange price is the:
a. objectivity principle
b. cost principle
c. revenue recognition principle
d. matching principle
1. The accounting equation can be stated as:
a. Assets = Liabilities - Owner's Equity
b. Assets - Liabilities = Owner's Equity
c. Liabilities = Assets + Owner's Equity
d. Owner's Equity = Assets + Liabilities
2. Receiving cash from a customer in payment of an account receivable would:
a. decrease total assets and increase owner's equity
b. increase owner's equity and increase liabilities
c. increase total assets and decrease liabilities
d. have no effect on total assets or owner's equity
3. Borrowing money and signing a note payable would:
a. increase total assets and increase liabilities
b. decrease liabilities and increase total assets
c. increase liabilities and increase owner's equity
d. increase total assets and increase owner's equity
4. The financial statement that presents a summary of the revenues and expenses of an entity is called the:
a. statement of owner's equity
b. statement of financial position
c. income statement
d. balance sheet
12 years ago
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