1) The future value of $200 received today and deposited at 8 percent for three years is ________.
A. speculative; investment grade
B. prime quality; medium grade
C. medium grade; lowest grade
D. prime quality; speculative
3) A(n) ________ is a paid individual, corporation, or a commercial bank trust department that acts as a third party to a bond indenture.
A. bond rating agency
B. bond issuer
C. investment banker
4) The future value of an ordinary annuity of $2,000 each year for 10 years, deposited at 12 percent, is ________.
5) What is the approximate yield to maturity for a $1,000 par value bond selling for $1,120 that matures in 6 years and pays 12 percent interest annually?
6) The future value of an annuity of $1,000 each quarter for 10 years, deposited at 12 percent compounded quarterly is ________.
7) ________ means that subsequent creditors agree to wait until all claims of the are senior debt satisfied before having their claims satisfied.
A. Security interest
B. Bond indenture
D. Sinking fund requirement
8) The return expected from an asset is fully defined by its ________.
A. discount rate
B. cash flow and timing
C. risk and cash flow
9)The present value of a $25,000 perpetuity at a 14 percent discount rate is ________.
10) Review Question? 6-12 and 6-13(LO6-6) Why is it important for financial managers to understand the valuation process? What are the three key inputs to the valuation process?
11) The rate of return earned on an investment of $50,000 today that guarantees an annuity of $10,489 for six years is approximately ________.
12) $1,200 is received at the beginning of year 1, $2,200 is received at the beginning of year 2, and $3,300 is received at the beginning of year 3. If these cash flows are deposited at 12 percent, their combined future value at the end of year 3 is ________.
A. $ 6,700
C. $ 8,142
13) The term structure of interest rates is the relationship between ________.
A. the maturity and rate of return for bonds with similar level of risk
B. the general expectation of inflation and nominal rate of return for bonds
C. the present value of principal and coupon rate of the bonds
D. the general expectation of inflation and real rate of return for bonds
14) The price of a bond with a fixed coupon rate and the required return have a relationship that is best described as ________.
D. perfect positive correlation
15) The present value of $100 received at the end of year 1, $200 received at the end of year 2, and $300 received at the end of year 3, assuming an opportunity cost of 13 percent, is________.
A. $ 453
16) If a United States Savings bond can be purchased for $14.60 and has a maturity value at the end of 25 years of $100, what is the annual rate of return on the bond
A. 9 percent
B. 8 percent
C. 7 percent
D. 6 percent
17) The ________ feature permits the issuer to repurchase bonds at a stated price prior to maturity.
18) A type of long term financing used by both corporations and government entities is ________.
A. retained earnings
B. common stocks
D. preferred stocks
19) ________ rate of interest is the actual rate charged by the supplier and paid by the demander of funds.
C. Risk free
We value our customers and so we ensure that what we do is 100% original..
With us you are guaranteed of quality work done by our qualified experts.Your information and everything that you do with us is kept completely confidential.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
The Product ordered is guaranteed to be original. Orders are checked by the most advanced anti-plagiarism software in the market to assure that the Product is 100% original. The Company has a zero tolerance policy for plagiarism.Read more
The Free Revision policy is a courtesy service that the Company provides to help ensure Customer’s total satisfaction with the completed Order. To receive free revision the Company requires that the Customer provide the request within fourteen (14) days from the first completion date and within a period of thirty (30) days for dissertations.Read more
The Company is committed to protect the privacy of the Customer and it will never resell or share any of Customer’s personal information, including credit card data, with any third party. All the online transactions are processed through the secure and reliable online payment systems.Read more
By placing an order with us, you agree to the service we provide. We will endear to do all that it takes to deliver a comprehensive paper as per your requirements. We also count on your cooperation to ensure that we deliver on this mandate.Read more