Chapter 15-16 practice Test

# Chapter 15-16 practice Test - Blackboard Learning System 4...

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Unformatted text preview: 11/11/11 Blackboard Learning System 4 Your location: Assessments > View All Submissions > View Attempt View Attempt 1 of unlimited Title: CHAPTER 15-16_PRACTICE TEST Started: November 11, 2011 8:59 AM Submitted: November 11, 2011 9:30 AM Time spent: 00:30:40 Total score: 25/25 = 100% Total score adjusted by 0.0 Maximum possible score: 25 1. Assume that you purchase a \$1,000 corporate bond that pays 9.25 percent interest. What is the amount of interest that you receive each year? Student Value CorrectAnswer Feedback Response A. \$1,000.00 5-. B. \$92.50 100% a C. \$92.00 D. \$90.00 E. \$9.25 General Feedback: \$1000 x .0925 = \$92.50 Score: 1/1 Comments: Generally, interest on corporate bonds is paid every: Student Value CorrectAnswer Feedback Response A. month. B. three months. I C. six 100% months. D. nine months. Score: Comments: webctap.gardner—webb.edul. . .lcobaltMainFrame.dowebct 1I11 11/11/11 Blackboard Learning System 3. Which one of the following statements is true? Student Value CorrectAnswer Feedback Response . Corporate bonds do not have a maturity date. B. The maturity dates for corporate bonds are generally less than a year. . Corporate bonds do not have any default risk. . Corporate bonds are a form of equity. . Long—term 100% corporate bonds have maturities over 15 years. Score: 1/1 Comments: The financially independent firm or individual that acts as the bondholders' representative is the: Student Value Correct Feedback Response Answer . chairman of the board. . president of the corporation. C. debenture webctap.gardner—webb.edul. . ./cobaltMainFrame.dowebct 2/11 11/11/11 Blackboard Learning System D. indenture holder I E trustee. 100% 5 Score: 1/1 Comments: 5. A bond that is backed only by the reputation of the issuing corporation is called a(n) bond. Student Value Correct Answer Feedback Response A. debenture 100% M B. mortgage D. preemptive Score: 1/1 Comments: 6. A type of bond that is unsecured and gives bondholders a claim secondary to that of other designated bondholders with respect to both income and assets is called a: Student Value Correct Feedback Response Answer A. debenture bond. B. mortgage bond. C. subordinated 100% M debenture. D. preemptive bond. E. treasury bond. Score: 1/1 Comments: 7. Sandra Peterson has been thinking about investing in corporate bonds. She is concerned about safety and wants the most secure bond investment possible. She would most likely invest in bonds. webctap.gardner—webb.edul. . ./cobaltMainFrame.dowebct 3/11 11/11/11 Blackboard Learning System Student Value Correct Feedback Response Answer A. debenture B mortgage 100% M C. speculative D. convertible E. subordinated Score: 1/1 Comments: 8. A \$l,000 corporate bond is convertible to 25 shares of the corporation's common stock. What is the minimum price that the stock must obtain before bondholders would consider converting the bond to stock? Student Value Correct Answer Feedback Response A. \$10 B. \$20 C. \$30 D. \$40 100% M E. \$50 General Conversion price = \$1,000/25 = \$40 Feedback: Score: 1/1 Comments: 9. A fund to which annual or semiannual deposits are made for the purpose of redeeming a bond issue is called a(n) fund. Student Value CorrectAnswer Feedback Response A. serial B. sinking 100% M C debenture E. money Score: 1/1 Comments: webctap.gardner—webb.edul. . ./cobaltMainFrame.dowebct 4/11 11/11/11 Blackboard Learning System 10. XYZ Corporation wants to retire a \$60 million bond issue before the maturity date. In order to call the bonds in this issue, the corporation must pay the bondholders the face value plus a premium. What is the typical premium for bonds that have been called? Student Value CorrectAnswer Feedback Response A. \$100 B. \$50-\$100 C. \$20-\$75 D. \$10- \$25 100% Score: Comments: 11. Today, bond ownership records are maintained using a process called: Student Value Correct Feedback Response Answer A. certified registration. B. book entry. 100% M C. revenue recognition process. D. coupon registration. E. general obligation process. Score: 1/1 Comments: 12. Which type of bond is not registered in the investor's name? Student Value CorrectAnswer Feedback Response A. revenue B. general obligation I C. bearer 100% D. zero— webctap.gardner—webb.edul. . ./cobaltMainFrame.dowebct 5/11 11/11/11 Blackboard Learning System ax- exempt Score: 1/1 Comments: 13. If overﬁll interest rates in the economy fall, a corporate bond with a fixed interest rate will genera y: Student Value Correct Feedback Response Answer I A. increase in 100% value. B. decrease in value. C. remain unchanged. D. become worthless. E. be returned to the corporation. Score: 1/1 Comments: 14. Which one of the following statements is false? Student Value Correct Feedback Response Answer .An exc ha nge- traded fund invests in the stocks or securities contained in a stock or securities index. B. With an exchange- traded fund, an investor can purchase as little as one webctap.gardner—webb.edul. . ./cobaltMainFrame.dowebct 6/11 11/11/11 Blackboard Learning System C. The return on shares in an exchange- traded fund tend to minor the performance of the index. 51 D. A passively- 100% managed exchange- traded fund manager needs to make more decisions than an actively- managed mutual fund manager. . Exchange- traded funds are increasing in popularity. Score: 1/1 Comments: 15. Approximately percent of all mutual funds are open-end funds. Student Value CorrectAnswer Feedback Response A.5 E. 92 100% 5 Score: 1/1 Comments: 16. A mutual fund in which new shares are issued and existing shares redeemed by the investment company at the request of investors is called a(n) fund. webctap.gardner—webb.edul. . ./cobaltMainFrame.dowebct 7/11 11/11/11 Blackboard Learning System Student Value Correct Answer Feedback Response A. closed-end B. open-end 100% M E. convertible Score: 1/1 Comments: 17. The Capitalist Mutual Fund's portfolio is valued at \$45 million. The fund has liabilities of \$3 million, and the investment company sponsoring the fund has issued 1,600,000 shares. What is the fund's net asset value? Student Value CorrectAnswer Feedback Response A. \$100.00 B. \$26.25 100% a c. \$52.50 D. \$3.75 E. \$1.00 General NAV = (\$45 million - \$3 million)/1.6 million = \$26.25 Feedback: Score: 1/1 Comments: 18. For most mutual funds, the net asset value is calculated: Student Value CorrectAnswer Feedback Response A. yearly. B quarterly. C weekly D. daily. 100% M E. hourly. Score: 1/1 Comments: 19. A mutual fund in which investors pay a commission every time they purchase shares is called webctap.gardner—webb.edul. . ./cobaltMainFrame.dowebct 8/11 11/11/11 Blackboard Learning System a(n) fund. Student Value Correct Answer Feedback Response A. closed-end C. load 100% M E. convertible Score: 1/1 Comments: 20. When an investor purchases shares in a load fund, the average sales charge is usually between percent. Student Value CorrectAnswer Feedback Response A. 0.5 to 2 Score: 1/1 Comments: 21. Bob Newsorne purchased 250 shares of the Northern Lights Growth Fund. The purchase cost was \$30 per share. If this fund charges a 3 percent load, what is the commission amount he will pay the investment company? Student Value CorrectAnswer Feedback Response A. \$3 C \$300 D. \$225 100% a E. \$250 General Commission = 250 x \$30 x .03 = \$225 Feedback: Score: 1/1 Comments: webctap.gardner—webb.edul. . ./cobaltMainFrame.dowebct 9/11 11/11/11 Blackboard Learning System 22. The management fee for most mutual funds ranges between percent. Student Value CorrectAnswer Feedback Response A. 0.25 to 100% 5 Score: Comments: 23. A 1 to 5 percent fee that investors pay when they withdraw their investment from a mutual fund is called a: Student Value Correct Feedback Response Answer A. withdrawal fee. B. 12b- 1 fee. H C. contingent 100% deferred sales load. D. front—end load. E. management fee. Score: Comments: 24. A fee that some investment companies charge for advertising and marketing a mutual fund is called a: Student Value CorrectAnswer Feedback Response A. 14A- 1 fee. B. 12b-1 fee. 100% M C. 18-2 fee. D. 403(b) webctap.gardner—webb.edul. . ./cobaltMainFrame.dowebct 10l11 11l11/11 Blackboard Learning System E. 401(k) fee. Score: 1/1 Comments: 25. Another name for a mutual fund that doesn't charge a load, but does charge an ongoing higher 12b-1 fee is a class fund. Student Value CorrectAnswer Feedback Response A A B. B C. C 100% E Score: 1/1 Comments: webctap.gardner—webb.edul. . ./cobaltMainFrame.dowebct 11l11 ...
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