If ATT’s 8% coupon bonds maturing in 2015 are selling for 103%

Subject: Business    / Finance
Question

If ATT’s 8% coupon bonds maturing in 2015 are selling for 103% of the par value, the yield to maturity of this issue must be higher than 8%.

True

False

1 points

QUESTION 2

Fundamental analysis is the research to forecast the movements in the prices of securities based on trends and patterns in past prices.

True

False

1 points

QUESTION 3

The efficient market hypothesis says that at any time the security price fully reflects all the information, so the price changes are not predictable.

True

False

1 points

QUESTION 4

The possible conflict of interest between stockholders and managers of a corporation is called the .

asymmetric information problem

agency problem

nonsystematic risk problem

proxy fight

1 points

QUESTION 5

____________ is a computerized trading network, where they match buy and sell orders that are entered electronically by customers.

NASDAQ

Electronic communications network

OTC

Third Market

1 points

QUESTION 6

________ are the markets in which corporations raise new capital.

Money markets

Mortgage markets

Primary markets

Secondary markets

1 points

QUESTION 7

________ are the markets for short-term debts.

Capital markets

Money markets

Secondary markets

Mortgage markets

1 points

QUESTION 8

A premium added to the equilibrium interest rate on a security if the security cannot be converted to cash on short notice is called ________.

interest rate risk premium

liquidity premium

maturity risk premium

default risk premium

1 points

QUESTION 9

The relationship between yields and maturities of securities is called ________.

liquidity preference theory

market segmentation theory

the term structure of interest rates

the interest rate risk

1 points

QUESTION 10

The ________ of a security measures the sensitivity of the security with respect to the market portfolio.

beta

coefficient of variation

standard deviation

expected return

1 points

QUESTION 11

The beta of the market portfolio is ________.

zero

one

between 0 and 1

between 1 and 2