14 - 1INCORRECT A price B theyieldtomaturity C D E...

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1 INCORRECT The current yield on a bond is equal to ________. A) annual interest divided by the current market  price B) the yield to maturity C) annual interest divided by the par value D) the internal rate of return E) none of the above Feedback: The current yield on a bond is equal to annual interest divided by the current market price. 2 INCORRECT To earn a high rating from the bond rating agencies, a firm should  have A) a low times interest earned ratio. B) a low debt to equity ratio. C) a high quick ratio. D) B and C. E) A and C. Feedback: To earn a high rating from the bond rating agencies, a firm should have a low debt to equity ratio  and a high quick ratio. 3 INCORRECT Ceteris paribus, the price and yield on a bond are A) negatively related. B) positively related. C) sometimes positively and sometimes  negatively related. D) not related. E) indefinitely related. Feedback: Ceteris paribus, the price and yield on a bond are negatively related. 4 INCORRECT A coupon bond is a bond that A) does not pay interest on a regular basis but  pays a lump sum at maturity. B) pays interest on a regular basis (typically every  six months). C) can always be converted into a specific  number of shares of common stock in the 
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issuing company.
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This note was uploaded on 03/06/2012 for the course FINANCE 5700 taught by Professor Bob during the Spring '12 term at websteruniv.edu.

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14 - 1INCORRECT A price B theyieldtomaturity C D E...

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