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Chapter 02 Asset Classes and Financial Instruments

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Question;49.;Bond market indexes;can be difficult to construct because;A.;they cannot;be based on firms' market values.;B.;bonds tend to;trade infrequently, making price information difficult to obtain.;C.;there are so;many different kinds of bonds.;D.;prices cannot;be obtained for companies that operate in emerging markets.;E.;corporations;are not required to disclose the details of their bond issues.;50.;With regard to a;futures contract, the long position is held by;A.;the trader;who bought the contract at the largest discount.;B.;the trader;who has to travel the farthest distance to deliver the commodity.;C.;the trader;who plans to hold the contract open for the lengthiest time period.;D.;the trader;who commits to purchasing the commodity on the delivery date.;E.;the trader;who commits to delivering the commodity on the delivery date.;51.;In order for you to;be indifferent between the after-tax returns on a corporate bond paying 9%;and a tax-exempt municipal bond paying 7%, what would your tax bracket need;to be?;A.;17.6%;B.;27%;C.;22.2%;D.;19.8%;E.;Cannot tell;from the information given;52.;In order for you to;be indifferent between the after-tax returns on a corporate bond paying 7%;and a tax-exempt municipal bond paying 5.5%, what would your tax bracket need;to be?;A.;22.6%;B.;21.4%;C.;26.2%;D.;19.8%;E.;Cannot tell;from the information given;53.;An investor;purchases one municipal and one corporate bond that pay rates of return of 6%;and 8%, respectively. If the investor is in the 25% marginal tax bracket, his;or her after-tax rates of return on the municipal and corporate bonds would;be ________ and ______, respectively.;A.;6% and 8%;B.;4.5% and 6%;C.;4.5% and 8%;D.;6% and 6%;54.;An investor;purchases one municipal and one corporate bond that pay rates of return of;7.2% and 9.1%, respectively. If the investor is in the 15% marginal tax;bracket, his or her after-tax rates of return on the municipal and corporate;bonds would be ________ and ______, respectively.;A.;7.2% and 9.1%;B.;7.2% and;7.735%;C.;6.12% and;7.735%;D.;8.471% and;9.1%

 

Paper#55078 | Written in 18-Jul-2015

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