投資學作業ch10

投資學作業ch10

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Chapter 10 Bond Prices and Yields 1. __________ you might find in a bond indenture. A. A dividend restriction clause is something B. A sinking fund clause is something C. A subordination clause is something D. All of the above are things h 2. To earn a high rating from the bond rating agencies, a company would want to have __________. A. a low times interest earned ratio B. a low debt to equity ratio C. a low quick ratio D. none of the above h 3. Consider the market segmentation theory of the term structure of interest rates. If the yield on long term bonds increases, one would expect the yield on short term bonds to __________. A. increase B. decrease C. change in an erratic manner D. not change h 4. __________ are examples of synthetically created zero coupon bonds. A. COLTS B. OPOSSMS C. TIGRS D. None of the above h
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5. A __________ bond is a bond where the bondholder has the right to cash in the bond before maturity at a specific price after a specific date. A. callable B. coupon C. put D. treasury h 6. Dollar denominated bonds sold by a German firm in the U.S. would be called ____________. A. Eurobonds B. Yankee bonds C. Samurai bonds D. Bulldog bonds h 7. Bonds issued in the currency of one country but sold in other national markets are called ______________. A. Eurobonds B. Yankee bonds C. Samurai bonds D. Bulldog bonds h 8. A bond which gives the owner the option to either extend the bond's maturity date for a given number of years, or to redeem the bond for its face value at some specified future date, is referred to as ______________. A. convertible B. callable C. putable
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h 9. The bonds of Elbow Grease Dishwashing Company have received a rating of "D" by Moody's. The "D" rating indicates __________. A. the bonds are investment grade B. the bonds are junk bonds C. the financial manager of Elbow Grease Dishwashing flunked his Finance course D. none of the above h 10. Bonds rated _____ or better by Standard and Poor's are considered investment grade. A. AA B. BBB C. BB D. CCC h 11. Consider the liquidity preference theory of the term structure of interest rates. On average, one would expect investors to require __________. A. a higher yield on short term bonds than long term bonds B. a higher yield on long term bonds than short term bonds C. the same yield on both short term bonds and long term bonds D. the liquidity preference theory cannot be used to make any of the above statements. h 12. Consider two bonds, A and B. Both bonds presently are selling at their par value of $1,000. Each pay interest of $120 annually. Bond A will mature in 5 years while bond B will mature in 6 years. If the yields to maturity on the two bonds change from 12% to 14%, __________. A. both bonds will increase in value but bond A will increase more than bond B
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投資學作業ch10

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