Homework%20_3%20Chapter%207

Homework%20_3%20Chapter%207 - Chapter 7 Student: _ 1. The...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 7 Student: ______________________________________________________________________ 1. The annual interest on a bond divided by the bond's market price is called the: A. current yield. B. call yield. C. market yield. D. yield-to-maturity. 2. The price you receive when you sell a Treasury bond is the _____ price. A. asked B. yield C. call D. bid 3. Which one of the following best reflects the time value of money? A. real rate of return B. term structure of interest rates C. Fisher effect D. effective annual yield 4. Sue is considering the purchase of one of two bonds, a 4.5 percent municipal bond or a 7 percent corporate bond. If Sue has a marginal tax rate of 35 percent, which bond should she chose? Why? Ignore state and local taxes. A. corporate bond because it has a higher aftertax yield B. corporate bond because it has a lower aftertax yield C. municipal bond because it has a higher aftertax yield D. either as their aftertax yields are equivalent
Background image of page 1

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

View Full DocumentRight Arrow Icon
5. You earned 8.4 percent on your investments last year. If your real rate of return was 5.9
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This document was uploaded on 08/05/2011.

Page1 / 3

Homework%20_3%20Chapter%207 - Chapter 7 Student: _ 1. The...

This preview shows document pages 1 - 3. Sign up to view the full document.

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