Saturday
July 26, 2014

Posts by Rajini


Total # Posts: 11

finance
Which of the following statements is CORRECT? (Points: 4) Junk bonds typically provide a lower yield to maturity than investment grade bonds. A debenture is a secured bond that is backed by some or all of the firm's fixed assets. Subordinated debt has less default risk tha...

finance
Which of the following statements is CORRECT? (Points: 4) Junk bonds typically provide a lower yield to maturity than investment grade bonds. A debenture is a secured bond that is backed by some or all of the firm's fixed assets. Subordinated debt has less default risk tha...

Finance
Asset-liability management is the term where the maturity of an asset is similar to the time that the liability expires. Which of the following is not good asset-liability matching? (Points: 4) Brand new quality car financed by a 5-year loan. Retirement fund for a 35-year old ...

Finance
If a financial institution is backed by any government program or indirect guarantee, any bonds purchased must be "rated" at investment grade or better. The rating agency is a third party with no connections with the bond issuer or the bond investor. Which of the fol...

Finance
Which of the following events would make it more likely that a company would choose to call its outstanding callable bonds? (Points: 4) Market interest rates decline sharply. The company's bonds are downgraded. Market interest rates rise sharply. Inflation increases signif...

Finance
Which of the following would be most likely to increase the coupon rate that is required to enable a bond to be issued at par? (Points: 4) Adding a call provision. Adding additional restrictive covenants that limit management's actions. Adding a sinking fund. The rating ag...

Finance
Rollincoast Incorporated issued BBB bonds two years ago that provided a yield to maturity of 11.5%. Long-term risk-free government bonds were yielding 8.7% at that time. The current risk premium on BBB bonds versus government bonds is half of what it was two years ago. If the ...

Finance
Most institutional investors purchase long-term bonds, as assets for their investment portfolios, to offset long-term liabilities they have on their balance sheets. Which statement below helps explain why do they not like call provisions in bonds? (Points: 4) Adding a call pro...

Finance
Yield to maturity (YTM) is the calculation utilizing the current price of the investment, the coupon cash flows and the par amount at maturity. However, the mathematics of the YTM calculation is virtually wrong or incorrect in the real world for coupon bonds greater than zero ...

Finance
A 12-year bond has an annual coupon rate of 9%. The coupon rate will remain fixed until the bond matures. The bond has a yield to maturity of 7%. Which of the following statements is CORRECT? (Points: 4) The bond is currently selling at a price below its par value. If market i...

Finance
Some institutional investors prefer zero coupon bonds over coupon bonds of the same maturity (and same quality). They will ever purchase a lower YTM zero coupon than the same maturity coupon bond. Which statement below best describes why they do this? (Points: 4) Coupon paymen...

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