FIN 303 Samples of Possible Exam Questions (for Chapter 2)
1.) Hedge funds are:
a. Similar to mutual funds because hedge funds accept money from savers.
b. Different from mutual funds because hedge funds are largely unregulated.
c. Different from mutual f
Identify the letter of the choice that best completes the statement or answers the question.
The market value of any real or financial asset, including stocks, bonds, or art work, may
be found by determining future cash flows and then disc
2.Why is the yield to call a more appropriate measure to use for
callablebonds with high couponsrather than the yield to maturity?
Answer:High coupon bonds face a greater chance of being called than
lowcoupon bonds so investors will more likely to receive
TOPIC 6: INTEREST RATES AND BOND VALUTION
Answers to Concepts Review and Critical Thinking Questions
Q6.8 Bond Ratings. Companies pay rating agencies such as Moody's and S&P to rate their bonds, and the costs
can be substantial. However, companies are not