Video đang hot
Discounted cash flowsAnswer: b Diff: E
1.The market value of any real or financial asset, including stocks,bonds, or art work, may be found by determining future cash flows andthen discounting them back to the present.
a.True
b.False
Issuing bondsAnswer: b Diff: E
2.If a firm raises capital by selling new bonds, the buyer is called the”issuing firm,” and the coupon rate is generally set equal to therequired rate.
a.True
b.False
Interest rate riskAnswer: b Diff: E
3.A 20-year original maturity bond with 1 year left to maturity has moreinterest rate risk than a 10-year original maturity bond with 1 yearleft to maturity. (Assume that the bonds have equal default risk andequal coupon rates.)
a.True
b.False
Interest rate riskAnswer: b Diff: E
4.Because short-term interest rates are much more volatile than long-termrates, you would, in the real world, be subject to much more interestrate risk if you purchased a 30-day bond than if you bought a 30-yearbond.
a.True
b.False
Bond prices and interest ratesAnswer: a Diff: E
5.For bonds, price sensitivity to a given change in interest ratesgenerally
increases as years remaining to maturity increases.
a.True
b.False
LINK DOWNLOAD
