Homework Answers
16. A corporate coupon bond pays coupon to the investors till the maturity and then finally pays back the coupon plus the face value of the bond.
So, the interest only loan also allows the borrower to make the interests payments and then the borrower can finally pay back the principal in lump-sum when he has the required cash in hand, anytime in the future.
So, the correct option is option A.
17. The Gordon growth model assumes that the as dividends grow at the same rate for forever, then the share price will grow at the same rate as the dividends.
So, the correct option is option C.
18. Diversification is the negative correlation between the assets. When no two assets are correlated with each other, the portfolio has diversification benefits which reduces the overall risk of the portfolio
So, the correct option is option D.
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9. What is a common example of an interest-only loan? A. Corporate coupon bond B. Car...
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1. What is the yield to maturity of a bond that pays 12% coupon rate with semi-annual coupon payments, has a par value of $1,000, matures in 9 years, and is currently selling for $897? a) 14.05% b) 11.90% c) 7.03% d) 12.97% 2. a company just paid a dividend of $1.25, and those dividends are expected to grow at a constant rate of 5% forever. If the required return of the investors is 11%, what is the stock price...
I'm stuck on some HW problems, Can someone please answer the following questions? It is a...
I'm stuck on some HW problems, Can someone please answer the
following questions? It is a multi-part question. Please hurry up
and answer! I need these answers ASAP!!! Thumbs up Guaranteed for
best answer!
Which of the following statements about bonds is TRUE? . A. If a $1,000 bond with an annual coupon of $100 is selling at a discount, its YTM is greater than 10%. • B. If nothing else changes, a discount bond's price will tend to decrease...
1. (Bonds) A zero-coupon bond has a $1,000 par value, 10 years to maturity, and sells...
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1. A corporate bond has a 12 percent coupon, pays interest semiannually, and matures in 10...
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1. A corporate bond has a 12 percent coupon, pays interest semiannually, and matures in 10...
1. A corporate bond has a 12 percent coupon, pays interest semiannually, and matures in 10 years at $1,000. If the investor's required rate of return is 14 percent, what should the current market price of the bonds be? 2. North Pole Air has an issue of preferred stock outstanding that pays dividends of $8.50 annually. The par value of each preferred share is $100. Investors require a 12.25 percent rate of return on this stock. The next annual dividend...
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Bond A is a 12-year 7% annual coupon bond. Bond B is a 12-year 9% annual...
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A U.S. Treasury bill is an example of a O A. coupon bond O B. simple...
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1. What is the yield to maturity of a bond that pays 12% coupon rate with semi-annual coupon payments, has a par value of $1,000, matures in 9 years, and is currently selling for $897? a) 14.05% b) 11.90% c) 7.03% d) 12.97% 2. a company just paid a dividend of $1.25, and those dividends are expected to grow at a constant rate of 5% forever. If the required return of the investors is 11%, what is the stock price...
I'm stuck on some HW problems, Can someone please answer the
following questions? It is a multi-part question. Please hurry up
and answer! I need these answers ASAP!!! Thumbs up Guaranteed for
best answer!
Which of the following statements about bonds is TRUE? . A. If a $1,000 bond with an annual coupon of $100 is selling at a discount, its YTM is greater than 10%. • B. If nothing else changes, a discount bond's price will tend to decrease...
1. A corporate bond has a 12 percent coupon, pays interest semiannually, and matures in 10 years at $1,000. If the investor's required rate of return is 14 percent, what should the current market price of the bonds be? 2. North Pole Air has an issue of preferred stock outstanding that pays dividends of $8.50 annually. The par value of each preferred share is $100. Investors require a 12.25 percent rate of return on this stock. The next annual dividend...
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