Investments Sample Final

Investments Sample Final - I nvestments Sample F inal FINN...

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

View Full Document Right Arrow Icon
Investments Sample Final FINN 3063 Investments - Sample Final Questions (second part) 2. Consider the multi-factor APT with two factors. The risk premiums on the factor 1 and factor 2 portfolios are respectively 5% and 3%. Stock A has a beta of 1.4 on factor 1, and a beta of 0.5 on factor 2. The expected return on stock A is 14%. If no arbitrage opportunities exist, the risk-free rate of return is __________. B) 5.5% 10. Sinking funds are commonly viewed as protecting the _______ of the bond. A) issuer B) underwriter C) holder D) dealer 13. Consider the expectations theory of the term structure of interest rates. If the yield curve is downward sloping, this indicates that investors expect short-term interest rates to __________ in the future. A) increase B) decrease C) not change D) change in an unpredictable manner 14. A coupon bond pays semi-annual interest is reported as having an ask price of 117% of its $1,000 par value in the Wall Street Journal. If the last interest payment was made 2 months ago and the coupon rate is 6%, the invoice price of the bond will be __________. A) $1,140 B) $1,170 C) $1,180 D) $1,200 15. A bond will sell at a premium when __________. A) its coupon rate is greater than its current yield and its current yield is greater than its
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.

Page1 / 3

Investments Sample Final - I nvestments Sample F inal FINN...

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