FINA3317 PracticeMidTermExamSpring2014solutions

Probably selling us treasury bonds in order to buy

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Unformatted text preview: rom an investment. D. Probably selling US Treasury bonds in order to buy corporate bonds. E. Probably selling T-bills in order to buy commercial paper. F. None of the above. ____27. If the term spread increases from 0.5% to 1.5% then investors are (please answer all that apply): [Ch. 4, 12] A. More willing to securities with a long time until maturity. B. More willing to invest in more risky securities. C. More patient about receiving money from an investment. D. Probably selling US Treasury bonds in order to buy US T -Bills. E. Probably selling US T-Bills in order to buy US Treasury bonds. F. None of the above. ____28. A US-based bank issues a bond that will pay a 5% coupon with 15 years until maturity. The bond is unsecured but can repurchased by the issuer for a pr ice of $1,250. The bond is issued in London and is denominated in US dollars. The bondholder may also exchange this bond for 50 shares of common stock in the issuing firm. This bond is probably NOT: [Ch. 12] A. A callable bond. B. A...
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