_. The University of Memphi - Quiz Intermediate Managerial...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
It is recommended that you save your response as you complete each question. Question 1 (1 point) Save If the required rate of return on a bond is greater than its coupon interest rate (and rd remains above the coupon rate), the market value of that bond will always be below its par value until the bond matures, at which time its market value will equal its par value. (Accrued interest between interest payment dates should not be considered when answering this question.) True False Question 2 (1 point) Save A bond that is callable has a chance of being retired earlier than its stated term to maturity. Therefore, if the yield curve is upward sloping, an outstanding callable bond should have a lower yield to maturity than an otherwise identical noncallable bond. True False Question 3 (1 point) Save Which of the following statements is most correct? a) All else equal, long-term bonds have more interest rate risk than short term bonds b) All else equal, higher coupon bonds have more reinvestment risk than low coupon bonds c) All else equal, short-term bonds have more reinvestment risk than do long-term bonds d) All of the statements above are correct Question 4 (1 point) Save Which of the following events would make it more likely that a company would choose to call its outstanding callable bonds? a) A reduction in market interest rates b) The company's bonds are downgraded c) An increase in the call premium d) Answers a, b, and c are correct Question 5 (1 point) Save Which of the following statements is most correct? a) Rising inflation makes the actual yield to maturity on a bond greater than the quoted yield to Quiz - Intermediate Managerial Fin - FIR 4440 001 - 20108080652 - The . .. https://elearn.memphis.edu/d2l/lms/quizzing/user/attempt/quiz_attempt_pa. .. 1 of 5
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 10/03/2010 for the course FINANCE 08FB40447 taught by Professor Raymond during the Spring '10 term at University of Manchester.

Page1 / 5

_. The University of Memphi - Quiz Intermediate Managerial...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online