Chapter 8 & 9 quiz

9 January 2023
4.8 (221 reviews)
9 test answers

Unlock all answers in this set

Unlock answers (5)
question
all else constant, a coupon bond that is selling at a premium must have:
answer
a yield to maturity that is less than the coupon rate
question
all else constant, a bond will sell at _____ when the yield to maturity is ____ the coupon rate
answer
a discount, greater than
question
Which one of these bonds is the most interest-rate sensitive?
answer
see quiz
question
If its yield to maturity is less than its coupon rate, a bond will sell at a ____, and increase in market interest rates will _____
answer
premium, decrease this premium
question
All else held constant, interest rate risk will increase when the time to maturity ____
answer
increases or the coupon rate decreases
question
latcher's is a relatively new firm that is still in a period of rapid development. the company plans on retaining all of its earnings for the next six years. Seven years from now the company projects paying an annual dividend of $0.25 a share and then increasing that amount by 3% annually thereafter. to value this stock as of today, you would most likely determine the value of the stock ____ years from today before determining today's value.
answer
6
question
The closing price of a stock is quoted at 32.08 with a PE of 21 and a net change of .36. based on this information which of the following is correct?
answer
the current stock price is equivalent to 21 years of the firms current earnings per share
question
a limit order to buy
answer
guarantees the purchase price but not the order excecution
question
a stop order to sell at $46 will be executed:
answer
as a market order once a trade occurs at a price of $46 or less.