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##### FINC400 quiz 4

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Question;FINC400Week 4The quiz is accessible once and is available for the duration of 1.5-hours. Please do not exit from the quiz unless it has been completed, as it will not be accessible again.Question 1 of 254.0 PointsIf the inflation premium for a bond goes up, the price of the bondA.is unaffected.B.goes down.C.goes up.D.need more informationQuestion 2 of 254.0 PointsThe interest factor for the present value of a single amount is the inverse of the future value interest factor.A. TrueB. FalseQuestion 3 of 254.0 PointsThe time value of money is not a useful concept in determining the value of a bond or in capital investment decisions.A. TrueB. FalseQuestion 4 of 254.0 Points(point) The longer the time to maturity:A.the greater the price increase from an increase in interest rates.B.the less the price increase from an increase in interest rates.C.the greater the price increase from a decrease in interest rates.D.the less the price decrease from a decrease in interest rates.Question 5 of 254.0 Points(point) As the interest rate increases, the interest factor (IF) for the present value of $1 increases.A. TrueB. FalseQuestion 6 of 254.0 PointsFinancial capital does not includeA.stock.B.bonds.C.preferred stock.D.working capital.Question 7 of 254.0 PointsThe growth rate for the firm's common stock is 7%. The firm?s preferred stock is paying an annual dividend of $3. What is the preferred stock price if the required rate of return is 8%?A.$3.00B.$37.50C.$50.00D.none of theseQuestion 8 of 254.0 PointsIn paying off a mortgage loan, the amount of the periodic payment that goes toward the reduction of principal increases over the life of the mortgage.A. TrueB. FalseQuestion 9 of 254.0 PointsThe calculation of the cost of capital depends upon historical costs of funds.A. TrueB. FalseQuestion 10 of 254.0 Points(point) The calculation of the cost of capital depends upon historical costs of funds.A. TrueB. FalseQuestion 11 of 254.0 PointsAs the interest rate increases, the interest factor (IF) for the present value of $1 increases.A. TrueB. FalseQuestion 12 of 254.0 Points(point) An annuity may be defined asA.a payment at a fixed interest rate.B.a series of payments of unequal amount.C.a series of yearly payments.D.a series of consecutive payments of equal amounts.Reset Selectionuestion 13 of 254.0 PointsAs the time period until receipt increases, the present value of an amount at a fixed interest rateA.decreases.B.remains the same.C.increases.D.Not enough information to tell.Question 14 of 254.0 Points(point) Within the capital asset pricing modelA.the risk-free rate is usually higher than the return in the market.B.the higher the beta the lower the required rate of return.C.beta measures the volatility of an individual stock relative to a stock market index.D.two of the above are true.Question 15 of 254.0 PointsThe risk premium is primarily concerned with business risk, financial risk, and inflation risk.A. TrueB. Falseuestion 16 of 254.0 PointsWhen inflation rises, preferred stock prices fall.A. TrueB. Falseuestion 17 of 254.0 Points(point) If the inflation premium for a bond goes up, the price of the bondA.is unaffected.B.goes down.C.goes up.D.need more information.uestion 18 of 254.0 PointsThe cost of capital for each source of funds is dependent on current market conditions and expected rates of return.A. TrueB. FalseQuestion 19 of 254.0 Points(point) The time value of money is not a useful concept in determining the value of a bond or in capital investment decisions.A. TrueB. Falseuestion 20 of 254.0 PointsThe time value of money concept becomes less critical as the prime rate increases.A. TrueB. FalseQuestion 21 of 254.0 PointsIf a single amount were put on deposit at a given interest rate and allowed to grow, its future value could be determined by reference to the future value of $1 table.A. TrueB. FalseQuestion 22 of 254.0 PointsThe risk premium is equal to the required yield to maturity minus both the real rate of return and the inflation premium.A. TrueB. FalseQuestion 23 of 254.0 PointsThe required return by investors is important to financial managers for all of the following reasons except:A.It influences the firm's cost of financingB.It influences their stock priceC.It is the primary driver of their financial ratiosD.It helps when pricing new issues of securitiesuestion 24 of 254.0 PointsLewis, Schultz and Nobel Development Corp. has an after-tax cost of debt of 4.5 percent. With a tax rate of 30 percent, what is the yield on the debt?A.4.41%B.9.0%C.1.89%D.6.43%Question 25 of 254.0 PointsYou are to receive $12,000 at the end of 5 years. The available yield on investments is 6%. Which table would you use to determine the value of that sum today?A.Present value of an annuity of $1B.Future value of an annuityC.Present value of $1D.Future value of $1

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