Homework Answers
CORRECT OPTION : e : II & III ONLY (THUMBS UP ONLY)
LOWER COUPON RATE LEADS TO HIGHER INTEREST RATE RISK AND LONGER TERM LEADS TO HIGHER RATE RISK.
AS COUPON RATES ARE LOWER, THE PRESENT VALUE WILL DECREASE FASTER AS RATE RISES COMPARED HIGHER COUPON RATE BONDS.
SAME WAY , LONGER TERM REPRESENTS HIGHER RISK AS INVESTOR HAVE TO ACCEPT CHANGE IN INTEREST RATE FOR LONGER TERM. SO LOSS AND GAIN BOTH WILL FLUCTUATE MORE
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Which of the following statements are correct concerning interest rate risk? I. The shorter the term,...
Which of the following statements concerning risk are correct? I. Non diversifiable risk is measured by...
Which of the following statements concerning risk are correct? I. Non diversifiable risk is measured by beta. II. The risk premium increases as diversifiable risk increases. III. Systematic risk is another name for non diversifiable risk. IV.Diversifiable risks are market risks you cannot avoid. O I and III only. O II and IV only. O land Il only. O III and IV only. O I, II, and III only.
Which of the following statement is not true about interest rate risk? (Only one correct answer.)...
Which of the following statement is not true about interest rate risk? (Only one correct answer.) Select one: a. Long term bonds have higher interest rate risk than short term bonds. ob. Interest rate risk is the uncertainty of how the bond price will change following the interest rate changes. c. Lower coupon bonds have lower interest rate risk. d. Bond prices are negatively related to interest rate movements.
6) Which of the following statements concerning the constant-growth dividend valuation model is (ar) correct 1....
6) Which of the following statements concerning the constant-growth dividend valuation model is (ar) correct 1. One simple method of estimating the dividend growth rate is to analyze the historical paltem of dividends II. The expected total return equals the return from capital gains plus the return from dividends TIL. The model is applicable to growth firms with initially high growth rates. IV. The intrinsic value calculated using this method can change from one investor to another if their risk-return...
Which of the statements (I-IV) is (are) most likely FALSE: I. When shorter maturity treasuries are...
Which of the statements (I-IV) is (are) most likely FALSE: I. When shorter maturity treasuries are yielding less than longer maturity treasuries, the yield curve is considered to be normal II. When shorter maturity treasuries start to yield more than longer maturity treasuries, the bond market is expecting the economy’s growth rate to slow, and the stock market usually falls in value shortly thereafter III. When shorter maturity treasuries are yielding more than longer maturity treasuries, it would be a...
Which one of the following is true? Interest Rate Risk is the risk that arises for...
Which one of the following is true? Interest Rate Risk is the risk that arises for bond owners from fluctuating interest rates. All other things being equal, the higher the coupon rate, the greater the interest rate risk. Interest Rate Risk is the risk that arises for bond owners from fluctuating interest rates. All other things being equal, the shorter the time to maturity, the lower the interest rate risk. O When comparing a 20-year bond versus a 1-year bond,...
Microsoft currently has an annual coupon bond outstanding. A decrease in the market rate of interest...
Microsoft currently has an annual coupon bond outstanding. A decrease in the market rate of interest will of the bond. Multiple Choice decrease the coupon rate increase the coupon rate increase the market price increase the time period decrease the market price Which of the following statements related to payback and discounted payback is/are correct? I. Payback is a better method of analysis than is discounted payback. II. Discounted payback is used more frequently in business than is payback III....
10. Which of the following must total to 100 percent? I. rates of return for the...
10. Which of the following must total to 100 percent? I. rates of return for the various economic states II. portfolio weights Ⅲ. probabilities of occurrence for the various economic states IV. betas of the individual securities held within a portfolio A). I and III only B). II and IV only C). II and III only D). II, III, and IV only E). I, II, III, and I 11. Which of following statements is correct, everything else equal? A) B)...
Which is true about the "duration" of bonds? A. The longer the term, the shorter the...
Which is true about the "duration" of bonds? A. The longer the term, the shorter the duration. B. The lower the yield, the shorter the duration. C. For zero-coupon bonds, the term is the duration. D. Duration is related to yield (or internal rate of return) of a bond. Regarding bonds in the secondary market... A. their prices are unrelated to the prevailing interest rate environment. B. prices of bonds with more time to maturity are less sensitive to the...
Part A Which f the following statements about enzymes is/are TRUE? I. Enzymes that require cofactors...
Part A Which f the following statements about enzymes is/are TRUE? I. Enzymes that require cofactors cannot function without them. Il. Enzymes speed up the rate of a reaction by decreasing the AG IlI. Enzymes are able to catalyze both the forward and reverse reaction. OI only OIl only IlI onl Il and IIl only l and Ill only I, Il, and III
why choose d? 28. Recently, the Federal Reserve is considering raising the interest rate for the first time since 2006. Which of the following would result in the short run if the interest rate is inc...
why choose d?
28. Recently, the Federal Reserve is considering raising the interest rate for the first time since 2006. Which of the following would result in the short run if the interest rate is increased? . A lower inflation rate I A decrease in the money supply I A higher unemployment rate a. I and b. Il and III c. Iand IlI d. I, II, and ill
28. Recently, the Federal Reserve is considering raising the interest rate for...
Which of the following statements concerning risk are correct? I. Non diversifiable risk is measured by beta. II. The risk premium increases as diversifiable risk increases. III. Systematic risk is another name for non diversifiable risk. IV.Diversifiable risks are market risks you cannot avoid. O I and III only. O II and IV only. O land Il only. O III and IV only. O I, II, and III only.
Which of the following statement is not true about interest rate risk? (Only one correct answer.) Select one: a. Long term bonds have higher interest rate risk than short term bonds. ob. Interest rate risk is the uncertainty of how the bond price will change following the interest rate changes. c. Lower coupon bonds have lower interest rate risk. d. Bond prices are negatively related to interest rate movements.
6) Which of the following statements concerning the constant-growth dividend valuation model is (ar) correct 1. One simple method of estimating the dividend growth rate is to analyze the historical paltem of dividends II. The expected total return equals the return from capital gains plus the return from dividends TIL. The model is applicable to growth firms with initially high growth rates. IV. The intrinsic value calculated using this method can change from one investor to another if their risk-return...
Which one of the following is true? Interest Rate Risk is the risk that arises for bond owners from fluctuating interest rates. All other things being equal, the higher the coupon rate, the greater the interest rate risk. Interest Rate Risk is the risk that arises for bond owners from fluctuating interest rates. All other things being equal, the shorter the time to maturity, the lower the interest rate risk. O When comparing a 20-year bond versus a 1-year bond,...
Microsoft currently has an annual coupon bond outstanding. A decrease in the market rate of interest will of the bond. Multiple Choice decrease the coupon rate increase the coupon rate increase the market price increase the time period decrease the market price Which of the following statements related to payback and discounted payback is/are correct? I. Payback is a better method of analysis than is discounted payback. II. Discounted payback is used more frequently in business than is payback III....
10. Which of the following must total to 100 percent? I. rates of return for the various economic states II. portfolio weights Ⅲ. probabilities of occurrence for the various economic states IV. betas of the individual securities held within a portfolio A). I and III only B). II and IV only C). II and III only D). II, III, and IV only E). I, II, III, and I 11. Which of following statements is correct, everything else equal? A) B)...
Part A Which f the following statements about enzymes is/are TRUE? I. Enzymes that require cofactors cannot function without them. Il. Enzymes speed up the rate of a reaction by decreasing the AG IlI. Enzymes are able to catalyze both the forward and reverse reaction. OI only OIl only IlI onl Il and IIl only l and Ill only I, Il, and III
why choose d?
28. Recently, the Federal Reserve is considering raising the interest rate for the first time since 2006. Which of the following would result in the short run if the interest rate is increased? . A lower inflation rate I A decrease in the money supply I A higher unemployment rate a. I and b. Il and III c. Iand IlI d. I, II, and ill
28. Recently, the Federal Reserve is considering raising the interest rate for...
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