Homework 1:2.docx - 1 A bond that can be retired prior to...

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Homework 1:2.docx

1 .   A bond that can be retired prior to maturity by the issuer is a ____________ bond .
a. convertible
b. municipal
c. treasury
d. callable
e. international
Answer:  d.   callable
2 .   Which of the following are characteristics of preferred stock ? I ) It pays its holder a fixed amount of income each year , at the discretion of its managers . II ) It gives its holder voting power in the firm . III ) It s dividends are usually cumulative . IV ) Failure to pay dividends may result in bankruptcy proceedings .
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3 .   With regard to a futures contract , the long position is held by
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4 .   A call option allows the buyer to
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5 .   [ Show Calculation ] You purchased a futures contract on 5,000 bushels corn at a futures price of 331 . At the time of expiration the price was 343 . What was your profit or loss ?
a. - $ 12.00
b. $ 12.00
c. - $ 60,000
d. $ 60,000
e. $ 75.00
Answer:  d.   $ 60,000
1. A bond that can be retired prior to maturity by the issuer is a ____________ bond. a. convertible b. municipal c. treasury d. callable e. international
2. Which of the following are characteristics of preferred stock? I) It pays its holder a fixed amount of income each year, at the discretion of its managers. II) It gives its holder voting power in the firm. III) Its dividends are usually cumulative. IV) Failure to pay dividends may result in bankruptcy proceedings.
3. With regard to a futures contract, the long position is held by

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