2201AFE_Tutorial_04

2201AFE_Tutorial_04 - 2201AFE Corporate Finance TOPIC Interest Rates Bond Valuation and Stock Valuation 10 Multiple-Choice Questions 1 a b c d e 2

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2201AFE Corporate Finance TOPIC: Interest Rates, Bond Valuation and Stock Valuation. 10 Multiple-Choice Questions 1. The stated interest payment, in dollars, made on a bond each period is called the bond’s: a. coupon. b. face value. c. maturity. d. yield to maturity. e. coupon rate. 2. The principal amount of a bond that is repaid at the end of the loan term is called the bond’s: a. coupon. b. face value. c. maturity. d. yield to maturity. e. coupon rate. 3. The specified date on which the principal amount of a bond is repaid is called the bond’s: a. coupon. b. face value. c. maturity. d. yield to maturity. e. coupon rate. 4. A bond which, at the election of the holder, can be swapped for a fixed number of shares of common stock at any time prior to the bond’s maturity is called a _____ bond. a. zero coupon b. callable c. putable d. convertible e. warrant 5. A “fallen angel” is a bond that: a. lowered its annual interest payment. b.
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This note was uploaded on 10/10/2010 for the course ECON 7300 at University of Sydney.

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2201AFE_Tutorial_04 - 2201AFE Corporate Finance TOPIC Interest Rates Bond Valuation and Stock Valuation 10 Multiple-Choice Questions 1 a b c d e 2

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