hw4 - are only willing t lend something less than the...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Brineydi Peralta FIN 201 April 4, 2010 Chapter 6-7 6.1 U.S. Treasury are no longer risk free there are things like inflation and interest rates that might affect your return. 6.3 With regard to bid and ask prices on Treasury Bond, it is possible that the bid price could be higher, because people will not sell a security (asking price ) lower than the price they are willing t o pay for it (bidding price). 2. The value of the bond decreases so that the purchaser has a build-in gain and also because the bond pays less than the going rate, investor
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: are only willing t lend something less than the promise repayment. 4. 1,047.50*.08=83.8 6. 8.50+7.90=16.4/7.90=2.08 Chapter 7 7.3 A company might choose not to pay dividends to reinvest earnings in its business. Companies that do choose not to pay dividends tend to be companies that are growing quickly. 7.5 A preferred stock has a higher price than a common stock 2. 1.90/47.00+. 055= 9.5% 3. 1.90/(1+.055)= 2.00 9. 300,000/63=4,761.90/4=1190.48...
View Full Document

This note was uploaded on 10/08/2010 for the course MAT 109 taught by Professor Michael during the Spring '10 term at Peirce.

Ask a homework question - tutors are online