Midterm #2: PRACTICE EXAM
1 out of 8
Name
(no nicknames, please): ________________________________________
Circle your Section #
:
XXX
XXX
XXX
(XXX – XXX)
(XXX – XXX)
(XXX – XXX)
1.
You are only allowed to have with you a pen/pencil
and a calculator
(no books, notes,
computers, phones, etc). Extra scratch paper will be provided if you need it. You must have
your own calculator (no sharing).
2.
Round your interim work and final answers to the nearest three decimal places, and
write your final answer in the provided boxes. You must show work where applicable.
3.
You have 90 minutes to complete the exam. There are 8 pages and 20 questions. Maximum
possible score is 100 out of 100.
True/False
(4 points each / Total = 36 points)
1.
The standard deviation on a portfolio can be greater than that on every
asset in the portfolio.
True
False
2.
It is easier to take control over a firm whose board of directors has
staggered election terms.
True
False
3.
If Bond A has greater time to maturity than Bond B, then Bond A’s price
must be more sensitive to changes in interest rate fluctuations.
True
False
4.
Higher bond duration indicates that the bond’s price is more sensitive to
fluctuations in interest rates.
True
False
5.
If you hold a zerocoupon bond to maturity, then your annualized rate of
return is guaranteed to equal the original yield to maturity at time of
purchase (assuming the issuer does not default).
True
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 Fall '08
 MATTHEWJAMESBARCASKEY
 Dividend yield, Price per share

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