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Strayer FIn100 week 5 quiz 3




Question;Quiz 3: Chapters 7 and 8;1.;Which of the following will only be executed if the order's price;conditions are met?;An unlimited order;A trade;A limit order;A spread;2.;A 5.5 percent corporate coupon bond is callable in four years for a call;premium of one year of coupon payments. Assuming a par value of $1,000, what is;the price paid to the bondholder if the issuer calls the bond? (Assume annual;interest payments.);$220;$1,055;$1,000;$55;3.;Which of;the following terms is the chance that the bond issuer will not be able to make;timely payments?;Interest rate risk;Liquidity of interest rate risk;Term structure of interest rates;Credit quality risk;4.;Which of;the following is a true statement?;If interest rates fall, corporate bonds will have decreasing values.;If interest rates fall, U.S. Treasury bonds will have decreasing;values.;If interest rates fall, no bonds will enjoy rising values.;If interest rates fall, all bonds will enjoy rising values.;5.;At your discount brokerage firm, it costs $9.95 per stock trade. How;much money do you need to buy 100 shares of Ralph Lauren (RL), which trades at;$85.13?;$8,522.95;$8,503.00;$9,508.00;$8,503.05;6.;As;residual claimants, which of these investors claim any cash flows to the firm;that remain after the firm pays all other claims?;Common stockholders;Preferred stockholders;Creditors;Bondholders;7.;You would;like to sell 100 shares of Pfizer, Inc. (PFE). The current bid and ask quotes;are $27.22 and $27.25, respectively. You place a limit sell-order at $27.24. If;the trade executes, how much money do you receive from the buyer?;$5,446.00;$2,724.00;$2,725.00;$2,722.00;8.;A fast;growing firm recently paid a dividend of $0.50 per share. The dividend is;expected to increase at a 25 percent rate for the next 3 years. Afterwards, a;more stable 12 percent growth rate can be assumed. If a 15 percent discount;rate is appropriate for this stock, what is its value?;$22.62;$5.00;$36.46;$25.75;9.;Consider;the following three bond quotes, a Treasury note quoted at 87:25, and a;corporate bond quoted at 102.42, and a municipal bond quoted at 101.45. If the;Treasury and corporate bonds have a par value of $1,000 and the municipal bond;has a par value of $5,000, what is the price of these three bonds in dollars?;$877.81, $1,024.20, $5,072.50, respectively;$872.50, $1,000, $1,000, respectively;$1000, $1,000, $1,000, respectively;$1,000, $1,024.20, $1,001.45, respectively;10.;Which of the following terms is a comparison of market yields on;securities, assuming all characteristics except maturity are the same?;Credit quality risk;Liquidity of interest rate risk;Term structure of interest rates;Interest rate risk;11.;Which of;the following is a legal contract that outlines the precise terms between the;issuer and the bondholder?;Debenture;Enforcement codes;Prospectus;Indenture;12.;Which of the following is a debt security whose payments originate from;other loans, such as credit card debt, auto loans, and home equity loans?;Credit quality securities;Junk bonds;Asset-backed securities;Debentures;13.;The Dow Jones Industrial Average (DJIA) includes;500 firms that are the largest in their respective economic sectors.;all of the stock listed on the New York Stock Exchange.;30 of the largest (market capitalization) and most active companies in;the U.S. economy.;500 firms that are the largest as ranked by Fortune Magazine.;Top of Form;14.;On November 26, 2007, The Dow Jones;Industrial Average closed at 12,743.40, which was down 237.44 that day. What;was the return (in percent) of the stock market that day?;+1.83 percent;-0.02 percent;+0.02 percent;-1.83 percent;Top of Form;15.;Which of these investors earn returns;from receiving dividends and from stock price appreciation?;Stockholders;Investment bankers;Bondholders;Managers;16.;Pfizer;Inc. (PFE) has earnings per share of $2.09 and a P/E ratio of 11.02. What is;the stock price?;$18.97;$5.27;$0.19;$23.03;17.;We can;estimate a stock's value by;using the book value of the total stockholder equity section.;discounting the future dividends and future stock price appreciation.;compounding the past dividends and past stock price appreciation.;using the book value of the total assets divided by the number of;shares outstanding.;18.;Which of these statements is false?;The bond market is larger than the stock market.;Bonds are always less risky than stocks.;Some bonds offer high potential for rewards and, consequently, higher;risk.;Bonds are more important capital sources than stocks for companies and;governments.;Top of Form;19.;Which of the following determines the;dollar amount of interest paid to bondholders?;Market rate;Call premium;Original issue discount;Coupon rate;20.;Determine;the interest payment for the following three bonds: 5.5 percent coupon;corporate bond (paid semi-annually), 6.45 percent coupon Treasury note, and a;corporate zero coupon bond maturing in 10 years. (Assume a $1,000 par value.);$55.00, $64.50, $0, respectively;$5.50, $6.45, $0, respectively;$27.50, $32.25, $100, respectively;$27.50, $32.25, $0, respectively;Bottom of Form;Bottom of Form;Bottom of Form


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