Finance multiple choice | Business & Finance homework help

Question 1.1. Yankee associations are issued by the U.S. legislation, but sold simply to stcollocate investors. (Points : 1)



Question 2.2. Treasury despoil associations are relishd because

(Points : 1)

I. they are elevated-quality associations.

II. they entertain a distant collocate of maturities.

III. they are very fluid.

IV. their allowance is not taxed until the associations aged.

I and III simply

I, II and III simply

I, II and IV simply

I, II, III and IV

Question 3.3. Which of the forthcoming statements referring-to-to equipment confidence testament are chasten?

(Points : 1)

I. Equipment confidence testament are typically used to establish funds for purchasing airplanes and railroad engines.

II. Equipment confidence testament are usually issued delay a unique manliness continuance.

III. Equipment confidence testament naturally aged in 20 to 30 years.

IV. Equipment confidence testament publicly propose above-average succumbs.

I and IV simply

II and IV simply

I and III simply

I, III and IV simply

Question 4.4. In an inflationary environment, the concern liquidations on Treasury inflation-indexed contracts growth aggravate age. (Points : 1)



Question 5.5. Bondholders can win allowance twain from concern and from chief gains. (Points : 1)



Question 6. 6. Discuss at last three differences between investing in hoards and investing in associations. (Points : 1)

1.Corporations are grateful to pay a agricultural concern scold on associations occasion dividends on divide are discretionary.


2. Concern remunerated on associations contribute a tax-shield occasion dividend liquidations do not


3. Concern on Bonds are a predictable firm attendency that would not shift occasion dividend liquidations can vary


Question 7.7. Collateralized hypothecation contracts are proportionately unendangered boardings exclude (Points : 1)

when concern scolds melt.

when inflation is elevated.

when settlement charges discard.

when hypothecation holders refinance constantly.

Question 8.8. Investment-progression associations are past concern scold easily-affected than junk associations. (Points : 1)



Question 9.9. Which one of the forthcoming statements referring-to-to a global inspection of the association chaffer is chasten? (Points : 1)

The United States today accounts for about seventy-five percent of the available agricultural-allowance securities worldwide.

U.S. pay associations portio twain concern and primary liquidations in euros.

Foreign associations, relish junk associations, entertain elevated failure endanger.

Exshift scold fluctuations rule the produce wined on strange-pay association holdings.

Question 10.10. If a association rating instigates from a BB to a BBB rating (Points : 1)

the association get quiet be classified as junk.

it must too instigate from a Ba to a Baa rating.

the chaffer succumb on the association get melt.

the chaffer charge of the association get melt.

Question 11.11. Under natural economic stipulations, the elder fountain of endanger faced by investors who alienation boarding progression associations is (Points : 1)

purchasing capability endanger.

concern scold endanger.

liquidity endanger.

failure endanger.

Question 12.12. The judicious flatter charge of an 8% association could be as elevated as $1,080. (Points : 1)



Question 13.13. A association which has a wide flatter (Points : 1)

does not entertain to be redeemed when it reaches manliness.

can be uninhabited at any age anterior to manliness contributed six months give-heed-to is ardent.

cannot be uninhabited for a peculiar continuance of age behind which it can be uninhabited at any age.

can be uninhabited at any age during the judicious flatter continuance but behind that age can not be redeemed anterior to manliness.

Question 14.14. Which of the forthcoming factors are interjacent in the rating dissection of a corposcold association?

(Points : 1)

I. the issue's indenture stipulations.

II. the fluidity aspect of the issuing fraternity.

III. the issuing fraternity's referring-to claim package.

IV. the possession of the fraternity's winings.

I and II simply

I, II and III simply

II, III and IV simply

I, II, III and IV

Question 15.15. Which one of the forthcoming synthesis of features causes association charges to be the most sublimable? (Points : 1)

low coupon, lacking manliness

elevated coupon, lacking manliness

low coupon, hanker manliness

elevated coupon, hanker manliness

Question 16.16. Convertible associations are chiefly tempting when hoard charges are progress. (Points : 1)



Question 17.17. The Franklin Fraternity issued a 6% association three years ago at par appreciate. The chaffer concern scold on resembling associations today is 5%. The Franklin Fraternity association currently pays ________ a year in concern and the association sells at a ________. (Points : 1)

$60; discount

$60; guerdon

$50; discount

$50; guerdon

Question 18.18. Each concern liquidation on a 6%, semi-annual association is $60. (Points : 1)



Question 19.19. One of the elder problems associated delay hypothecation-backed securities is that (Points : 1)

the primary concern of each liquidation is considered taxable allowance.

they are refundable.

they are self-liquidating.

they are serial issues.

Question 20.20. When associations are judiciously borrowed to an all-equity portfolio the (Points : 1)

raze of endanger of the portfolio is impacted past than the scold of revert.

scold of revert on the portfolio is impacted past than the raze of endanger.

raze of endanger and the scold of revert are equivalent impacted.

scold of revert is not impacted but the raze of endanger is lowered.

Question 21.21. Which of the forthcoming types of endanger feign associations?

(Points : 1)

I. flatter endanger.

II. occupation endanger.

III. purchasing capability endanger.

IV. fluidity endanger.

III and IV simply

II, III and IV simply

I, III and IV simply

I, II, III and IV

Question 22.22. Which one of the forthcoming variables has the loftyest goods on association charges? (Points : 1)

economic growth

concern scolds


hoard chaffer produce

Question 23.23. In public, strange-pay associations contribute ________ scolds of revert and ________ permutation goodss for U.S. investors. (Points : 1)

non-competitive; positive

competitive; positive

non-competitive; negative

competitive; negative

Question 24.24. Which of the forthcoming characteristics engage to collateralized hypothecation contracts?

(Points : 1)

I. All associationholders assent-to a pro-rata divide of all concern liquidations.

II. CMOs are derivative securities created from hypothecation-backed associations.

III. All primary liquidations are remunerated to the lackingest fostering tranche.

IV. CMOs entertain certain manliness continuances for each tranche.

I and II simply

I and III simply

I, II and III simply

II, III and IV simply

Question 25.25. The endanger guerdon factor of a association's chaffer concern scold is akin to the characteristics of the feature association and its issuer. (Points : 1)



Question 26.26. The par appreciate of a Treasury inflation-indexed contract is certain as $1,000 aggravate the activity of the association. (Points : 1)



Question 27.27. When the arrangement is moving toward a recession, the succumb on endangerier associations get atattend to (Points : 1)




become sublimable.

Question 28.28. Municipal associations are most tempting to residents of states delay elevated allowance tax scolds. (Points : 1)



Question 29.29. The foremost tranche of a collateralized hypothecation contract has (Points : 1)

the loftyest failure endanger.

the loftyest concern scold endanger.

the loftyest preliquidation endanger.

the loftyest sum endanger.

Question 30.30. Mortgage-backed securities are self-liquidating. (Points : 1)