{"id":13142,"date":"2020-11-24T09:05:23","date_gmt":"2020-11-24T09:05:23","guid":{"rendered":"http:\/\/onlineclassesguru.com\/index.php\/2020\/11\/24\/s-f-state-fin-355-quiz-2-multiple-choice-questions\/"},"modified":"2020-11-24T09:05:23","modified_gmt":"2020-11-24T09:05:23","slug":"s-f-state-fin-355-quiz-2-multiple-choice-questions","status":"publish","type":"post","link":"https:\/\/onlineclassesguru.com\/index.php\/2020\/11\/24\/s-f-state-fin-355-quiz-2-multiple-choice-questions\/","title":{"rendered":"S.f. state fin 355 quiz 2 multiple choice questions"},"content":{"rendered":"<style type=\"text\/css\"><\/style><div class=\"section the_content has_content\">\n<div class=\"section_wrapper\">\n<div class=\"the_content_wrapper\">\n<div>\n<p>QUIZ 2<br \/>\nQuiz Paper A 1, Quiz Paper B 6<br \/>\nWhich one of the following measures a bond\u2019s sensitivity to changes in market<br \/>\ninterest rates?<br \/>\na. yield to call<br \/>\nb. yield to market<br \/>\nc. duration<br \/>\nd. immunization<br \/>\ne. target date valuation<\/p>\n<p>JJ Industries will pay a regular dividend of $2.40 per share for each of the next four<br \/>\nyears. At the end of the four years, the company will also pay out a liquidating<br \/>\ndividend, and the company will cease operations. If the current share price is $50<br \/>\nand the discount rate is 10%, what must the liquidating dividend be?<br \/>\na. $40<br \/>\nb. $50<br \/>\nc. $58.60<br \/>\nd. $62.07<br \/>\ne. $65.87<\/p>\n<p>Quiz Paper A 3, Quiz Paper B 8<br \/>\nAn 8.5 percent coupon bond pays interest semiannually and has 10.5 years to<br \/>\nmaturity. The bond has a face value of $1,000 and a market value of $878.50. What<br \/>\nis the yield to maturity?<br \/>\na. 5.16 percent<br \/>\nb. 8.37 percent<br \/>\nc. 8.78 percent<br \/>\nd. 10.43 percent<br \/>\ne. 11.21 percent<\/p>\n<p>Quiz Paper A 4, Quiz Paper B 9<br \/>\nLKD Co. has 10 percent coupon bonds with a YTM of 8.6 percent. The current<br \/>\nyield on these bonds is 9.2 percent. How many years do these bonds have left until<br \/>\nthey mature? (Face value is $1,000 and coupons are paid semiannually.)<br \/>\na. 18.52 years<br \/>\nb. 18.14 years<br \/>\nc. 9.26 years<br \/>\nd. 9.07 years<\/p>\n<p>Quiz Paper A 5, Quiz Paper B 10<br \/>\nAtlantis Seafood Company stock currently sells for $70 per share. The company is<br \/>\nexpected to pay a dividend of $4.35 per share next year, and analysts project that<br \/>\ndividends should increase at 4.5% per year for the indefinite future. What must the<br \/>\nrelevant discount rate be for Atlantis stock?<br \/>\na. 7.869%<br \/>\nb. 8.255%<br \/>\nc. 10.334%<br \/>\nd. 10.714%<br \/>\ne. 10.994%<\/p>\n<p>Quiz Paper A 6, Quiz Paper B 16<br \/>\nLandon Air Corporation reported net income of $25 million for last year.<br \/>\nDepreciation expense totaled $10 million and capital expenditures came to $3<br \/>\nmillion. Free cash flow is expected to grow at a rate of 3% for the foreseeable future.<br \/>\nLandon Air faces a 35% tax rate and has $100 million (market value) in debt<br \/>\noutstanding. If required return on Landon Air\u2019s assets is 10.65%, what is the current<br \/>\ntotal value of Landon Air\u2019s equity (in millions)?<br \/>\na. $296.21<br \/>\nb. $318.30<br \/>\nc. $330.85<br \/>\nd. $418.30<br \/>\ne. $430.85<\/p>\n<p>Quiz Paper A 7, Quiz Paper B 17<br \/>\nWhich one of the following rates is used by brokerage firms as the basis for<br \/>\ndetermining margin loan rates?<br \/>\na. discount<br \/>\nb. Fed funds<br \/>\nc. prime<br \/>\nd. brokerage<br \/>\ne. call money<\/p>\n<p>Quiz Paper A 8, Quiz Paper B 18<br \/>\nAn increase in the retention ratio will:<br \/>\na. increase the payout ratio.<br \/>\nb. decrease a firm\u2019s sustainable rate of growth.<br \/>\nc. not affect the value of a firm\u2019s stock.<br \/>\nd. decrease the value of a firm\u2019s stock.<br \/>\ne. increase the value of a firm\u2019s stock.<\/p>\n<p>Quiz Paper A 9, Quiz Paper B 19<br \/>\nWhich one of the following orders is frequently used as a means to limit losses<br \/>\nresulting from a short sale?<br \/>\na. limit<br \/>\nb. market<br \/>\nc. day<br \/>\nd. stop-sell<br \/>\ne. stop-buy<\/p>\n<p>Quiz Paper A 10, Quiz Paper B 20<br \/>\nWhich one of the following rates is the rate a commercial bank must pay the Federal<br \/>\nReserve to borrow reserves overnight?<br \/>\na. Fed funds<br \/>\nb. discount<br \/>\nc. financial overnight<br \/>\nd. daily<br \/>\ne. institutional<\/p>\n<p>Quiz Paper A 11, Quiz Paper B 1<br \/>\nA Treasury bill has 36 days left to maturity. The bank discount yield on the bill is<br \/>\n4.14 percent. What is the effective annual rate?<br \/>\na. 4.30 percent<br \/>\nb. 4.36 percent<br \/>\nc. 4.40 percent<br \/>\nd. 4.45 percent<br \/>\ne. 4.49 percent<\/p>\n<p>Quiz Paper A 12, Quiz Paper B 2<br \/>\nA discount bond:<br \/>\na. has a coupon rate which is greater than the yield to maturity.<br \/>\nb. has a coupon rate which is less than the market rate of interest.<br \/>\nc. has a par value which is less than the market value.<br \/>\nd. is selling for more than face value.<br \/>\ne. is the name given to a bond that has been called prior to maturity.<\/p>\n<p>Quiz Paper A 13, Quiz Paper B 3<br \/>\nBest Value Outlet recently announced that it intends to pay dividends of $0.40,<br \/>\n$0.60, $0.75, and $1.00 per share over the next four years, respectively. After that,<br \/>\nthe plan is to increase the dividend by 3.5 percent annually. What is the current value<br \/>\nof this stock if the applicable discount rate is 13.5 percent?<br \/>\na. $6.44<br \/>\nb. $7.83<br \/>\nc. $8.17<br \/>\nd. $9.55<br \/>\ne. $13.10<\/p>\n<p>Quiz Paper A 14, Quiz Paper B 4<br \/>\nWhich one of the following models can be used to value the stock of a firm that<br \/>\nmaintains a one hundred percent retention ratio?<br \/>\na. two-stage dividend growth<br \/>\nb. residual income<br \/>\nc. perpetual dividend growth<br \/>\nd. supernormal dividend growth<br \/>\ne. dividend discount<\/p>\n<p>Quiz Paper A 15, Quiz Paper B 5<br \/>\nPure discount bonds which are created by separating the interest and principal<br \/>\npayments from U.S. Treasury bonds are called U.S. Treasury:<br \/>\na. notes.<br \/>\nb. bills.<br \/>\nc. STRIPS.<br \/>\nd. SWAPS.<br \/>\ne. tax-exempts.<\/p>\n<p>Quiz Paper A 16, Quiz Paper B 11<br \/>\nA price-weighted index consists of stocks A, B, and C which are priced at $38, $21,<br \/>\nand $26 a share, respectively. The current index divisor is 2.7. What will the new<br \/>\nindex divisor be if stock B undergoes a 3-for-1 stock split?<br \/>\na. 2.1684<br \/>\nb. 2.2553<br \/>\nc. 2.5890<br \/>\nd. 2.7000<br \/>\ne. 3.1447<\/p>\n<p>Quiz Paper A 17, Quiz Paper B 12<br \/>\nWhich of the following strategies is most likely to yield the best interest rate risk<br \/>\nimmunization results for a bond portfolio?<br \/>\na. Maturity matching<br \/>\nb. Duration matching<br \/>\nc. Buy and hold<br \/>\nd. Investing in interest rate-sensitive stocks.<\/p>\n<p>Quiz Paper A 18, Quiz Paper B 13<br \/>\nGL Enterprises has 130,000 shares of stock outstanding. Janet wants to sell 400 of<br \/>\nthese shares. The price she will have to pay is the _____ price.<br \/>\na. margin<br \/>\nb. bid<br \/>\nc. ask<br \/>\nd. broker<br \/>\ne. spread<\/p>\n<p>Quiz Paper A 19, Quiz Paper B 14<br \/>\nYou own a bond that pays semiannual interest payments of $40. The bond is callable<br \/>\nin 3 years at a premium of $80. What is the callable bond price if the yield to call is<br \/>\n9.7 percent? (The face value of this bond is $1,000.)<br \/>\na. $995.46<br \/>\nb. $1,016.86<br \/>\nc. $1,119.02<br \/>\nd. $1,124.87<br \/>\ne. $1,220.87<\/p>\n<p>Quiz Paper A 20, Quiz Paper B 15<br \/>\nThe _____ theory states that the shape of the yield curve reveals the financial<br \/>\nmarket\u2019s projections of future interest rates.<br \/>\na. market segmentation<br \/>\nb. market yield<br \/>\nc. maturity preference<br \/>\nd. expectations<br \/>\ne. rational rate<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"section section-post-footer\">\n<div class=\"section_wrapper clearfix\">\n<div class=\"column one post-pager\"><\/div>\n<\/div>\n<\/div>\n<div class=\"section section-post-intro-share\">\n<div class=\"section_wrapper clearfix\">\n<div class=\"column one\"><\/div>\n<\/div>\n<\/div>\n<p><center><a href=\"http:\/\/onlineclassesguru.com\/orders\/ordernow\"><img decoding=\"async\" src=\"https:\/\/encrypted-tbn0.gstatic.com\/images?q=tbn:ANd9GcTyj99p60XCLyLk1htB7-1neRt8-2QdnenNlQ&usqp=CAU\"target=\"_http:\/\/onlineclassesguru.com\/orders\/ordernow\"\/><\/center><p>","protected":false},"excerpt":{"rendered":"<p>QUIZ 2 Quiz Paper A 1, Quiz Paper B 6 Which one of the following measures a bond\u2019s sensitivity to changes in market interest rates? a. yield to call b. yield to market c. duration d. immunization e. target date valuation JJ Industries will pay a regular dividend of $2.40 per share for each of&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-13142","post","type-post","status-publish","format-standard","hentry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v17.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>S.f. state fin 355 quiz 2 multiple choice questions - onlineclassesguru<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"http:\/\/onlineclassesguru.com\/index.php\/2020\/11\/24\/s-f-state-fin-355-quiz-2-multiple-choice-questions\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"S.f. state fin 355 quiz 2 multiple choice questions - onlineclassesguru\" \/>\n<meta property=\"og:description\" content=\"QUIZ 2 Quiz Paper A 1, Quiz Paper B 6 Which one of the following measures a bond\u2019s sensitivity to changes in market interest rates? 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