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Corporate Financial Management (Bus536) Sample Practice Exam Spring 2018 Questions And Answers

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SUNY New Paltz

Corporate Financial Management (BUS536)

Chapter 08 – Interest Rates and Bond Valuation
Chapter 08 Interest Rates and Bond Valuation Answer Key
1. A bond that makes no coupon payments and is initially priced at a deep discount is called a _____ bond.
A. Treasury
B. municipal
C. floating-rate
D. junk
E. zero coupon
2. An asset characterized by cash flows that increase at a constant rate forever is called a:
A. growing perpetuity.
B. growing annuity.
C. common annuity.
D. perpetuity due.
E. preferred stock.
3. The stated interest payment, in dollars, made on a bond each period is called the bond’s:
A. coupon.
B. face value.
C. maturity.
D. yield to maturity.
E. coupon rate.
4. The principal amount of a bond that is repaid at the end of the loan term is called the bond’s:
A. coupon.
B. face value.
C. maturity.
D. yield to maturity.
E. coupon rate.
5. The specified date on which the principal amount of a bond is repaid is called the bond’s:
A. coupon.
B. face value.
C. maturity.
D. yield to maturity.
E. coupon rate.
6. The rate of return required by investors in the market for owning a bond is called the:
A. coupon.
B. face value.
C. maturity.
D. yield to maturity.
E. coupon rate.
7. The annual coupon of a bond divided by its face value is called the bond’s:
A. coupon.
B. face value.
C. maturity.
D. yield to maturity.
E. coupon rate.

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Corporate Financial Management (Bus536) Sample Practice Exam Spring 2018 Questions And Answers

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