1) Which of the following statements is FALSE about interest rates? A) As interest rates may be quoted for different time intervals, it is often necessary to rate to a time period that matches that of cash flows. B) The effective annual rate indicates the amount of interest that will be earned at the end of one year QThe annual percentage rate indicates the amount of simple interest earned in one year. D) The annual percentage rate indicates the amount of interest including the effect of compounding. adjust the intere 2) The effective annual rate (EAR) for a loan with a stated APR of 11% compounded quarterly is clos A) 12.61% B) 13.75% rn 1.46% 14.90% 3) The Sisyphean Company has a bond outstanding with a face value of $1000 that reaches maturit years. The bond certificate indicates that the stated coupon rate for this bond is 5.0% and that the c payments are to be made semiannually. Assuming the appropriate YTM on the Sisyphean bond is then this bond will trade at A) par B) a discount C) a premiunm D) none of the above 4) Which of the following bonds will be least sensitive to a change in interest rates if all bonds ha same initial yield to maturity? A) a ten-year bond with a $1,000 face value whose coupon rate is 5.8% APR paid semiannually B) a ten-year bond with a $1,000 face value whose coupon rate is 74% APR paid semiannually a 20-year bond with a $1,000 face value whose coupon rate is 5.8% APR paid semiannually D) a 20-year bond with a $1,000 face value whose coupon rate is 7.4% APR pa id semiannually 5) Jumbuck Exploration has a current stock price of $3.00 and is expected to sell for $3.15 in on time, immediately after it pays a dividend of S0.28. Which of the following is cdlosest to Jumbuc Exploration's equity cost of capital? B) 8.60% C) 14.33% D) 17.91% 1) Which of the following statements is FALSE about interest rates? A) As interest rates may be quoted for different time intervals, it is often necessary to rate to a time period that matches that of cash flows. B) The effective annual rate indicates the amount of interest that will be earned at the end of one year QThe annual percentage rate indicates the amount of simple interest earned in one year. D) The annual percentage rate indicates the amount of interest including the effect of compounding. adjust the intere 2) The effective annual rate (EAR) for a loan with a stated APR of 11% compounded quarterly is clos A) 12.61% B) 13.75% rn 1.46% 14.90% 3) The Sisyphean Company has a bond outstanding with a face value of $1000 that reaches maturit years. The bond certificate indicates that the stated coupon rate for this bond is 5.0% and that the c payments are to be made semiannually. Assuming the appropriate YTM on the Sisyphean bond is then this bond will trade at A) par B) a discount C) a premiunm D) none of the above 4) Which of the following bonds will be least sensitive to a change in interest rates if all bonds ha same initial yield to maturity? A) a ten-year bond with a $1,000 face value whose coupon rate is 5.8% APR paid semiannually B) a ten-year bond with a $1,000 face value whose coupon rate is 74% APR paid semiannually a 20-year bond with a $1,000 face value whose coupon rate is 5.8% APR paid semiannually D) a 20-year bond with a $1,000 face value whose coupon rate is 7.4% APR pa id semiannually 5) Jumbuck Exploration has a current stock price of $3.00 and is expected to sell for $3.15 in on time, immediately after it pays a dividend of S0.28. Which of the following is cdlosest to Jumbuc Exploration's equity cost of capital? B) 8.60% C) 14.33% D) 17.91%
