FIN 351 DeVry Week 4 Quiz Latest

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FIN 351 DeVry Week 4 Quiz Latest

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FIN 351 DeVry Week 4 Quiz Latest

FIN351

FIN 351 DeVry Week 4 Quiz Latest

FIN 351 DeVry Week 4 Quiz Latest

  1. (TCO 4)The most important feature of municipal bonds is _____.
  • the wide range of denominations and maturities
  • that the interest is not taxable by the federal government
  • the risk-free nature of this investment
  • its appeal to investors needing growth

Question 2. Question : (TCO 4) For the major bond-rating agencies, the lowest level of an investment grade bond is _____.

  • AA (investment grade includes AAA and AA)
  • A (investment grade includes AAA, AA, and A)
  • BBB (investment grade includes AAA, AA, A, and BBB)
  • B (investment grade includes AAA, AA, A, BBB, BB, and B)

Question 3. Question : (TCO 4) A corporate bond quoted at 108.25 is selling for _____.

  • $108.25
  • $1,082.50
  • $10,825
  • None of the above

Question 4. Question : (TCO 4) Assume a $1,000 treasury bill is quoted to pay 7% interest over a three-month period. What will be the price of the treasury bill?

  • $982.50
  • $980
  • $970
  • $980.50

Question 5. Question : (TCO 4) When should an investor calculate both yield to maturity and yield to call?

  • An investor should calculate both yield to maturity and yield to call whenever there is a call provision.
  • An investor should calculate both yield to maturity and yield to call when the sum of the present values of the interest payments exceeds the call price.
  • An investor should calculate both yield to maturity and yield to call when the market price is greater than or equal to the call price.
  • An investor should calculate both yield to maturity and yield to call whenever the funds can be reinvested.

Question 6. Question : (TCO 4) What will happen to the market value of a bond if interest rates increase?

  • The market value will decrease.
  • The market value will increase.
  • The market value will increase or decrease, depending on the general economic climate.
  • The market value should remain level.

Question 7. Question : (TCO 4) Short-term interest rates have _____ volatility in comparison to long-term interest rates.

  • much less
  • more
  • equal
  • slightly less

Question 8. Question : (TCO 4) The duration of a bond is determined by a combination of the maturity date and value, and _____.

  • the pattern of coupon payments
  • the call premium
  • the put premium
  • None of the above

Question 9. Question : (TCO 4) Factors which influence the relationship between duration and maturity include all of the following EXCEPT _____.

  • the face value of the bond
  • the coupon rate of the bond
  • the number of years to maturity
  • None of the above

Question 10. Question : (TCO 4) The duration on an 8%, 25-year bond is _____ the duration on a 9%, 30-year bond.

  • greater than
  • less than
  • equal to
  • There is not enough information to tell