TEST One - Your test grade is 90.91 Studentsanswers...

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TEST One

Your test grade is 90.91%The professor has configured this test to allow students to review:Questions answered incorrectly.Questions answered correctly.Students answers.Correct answers.QUESTION:1[QUESTION BANK ID:170467]TYPE:MULTIPLE CHOICECORRECTYou plan to analyze the value of a potential investment by calculating the sum of the present values of its expected cash flows. Which of the following would lower the calculated value of the investment?<< HIDE ANSWERSAThe cash flows are in the form of an annuity, and they total to $100,000. You learn that the annuity lasts for only 5 rather than 10 years, hence each payment is for $20,000 rather than for $10,000BThe discount rate increasesCThe riskiness of the investment’s cash flows decreasesDThe total amount of cash flows remains the same, but more of the cash flows are received in the earlier years and less are received in the later yearsEThe discount rate decreases
QUESTION:2[QUESTION BANK ID:121653]TYPE:MULTIPLE CHOICECORRECTWachowicz Corporation issued 15-year, noncallable, 7.5% annual coupon bonds at their par value of $1,000 one year ago. Today, the market interest rate on these bonds is 5.5%. What is the current price of the bonds, given that they now have 14 years to maturity?<< HIDE ANSWERS
QUESTION:3[QUESTION BANK ID:55019]TYPE:MULTIPLE CHOICECORRECTA 10-year Treasury bond has an 8% coupon, and an 8-year Treasury bond has a 10% coupon. Both bonds have the same yield to maturity. If the yield to maturity of both bonds increases by the same amount, which of the following statements would be CORRECT?<< HIDE ANSWERS
QUESTION:4[QUESTION BANK ID:22365]TYPE:MULTIPLE CHOICECORRECTThe expected return on Northeast Corporation’s stock is 14%. The stock’s dividend is expected to grow at a constant rate of 8%, and it currently sells for $50 a share. Which of the following statements is CORRECT?<< HIDE ANSWERS

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