1. Which one of the following statements concerning bond ratings is correct?

Moody's is the sole provider of bond ratings.

Investment grade bonds include only those bonds receiving an A or higher rating.

A "fallen angel" is a bond that fell from an A rating or above to a BBB rating.

Bond ratings consider the potential price volatility of a bond.

Bond ratings only assess the possibility of default.

2. Alpha shares are currently selling for $28.09 a share. Alice bought 200 shares one year ago at a price of $25.20 a share and received total dividend payments of $1.25 a share. What was her total rate of return?

11.47%

14.74%

16.43%

5.84%

6.51%

3. Which one of the following transactions occurs in the primary market?

Initial sale of JKL stock by JKL to Jamie

Sale of ABC stock by Fred Jones to Mary Smith

Transfer of MNO stock from Tom to his son, Jon

Tax-free gift of DEF stock to Heather by Jennifer

Repurchase of GHI stock from Tim by GHI

4. A stock report contains the following information: P/E 21.4, closing price 28.16, dividend 1.10, net chg .06, and an ask of 28.22 300. Which one of the following statements is correct given this information?

The dividend yield is 21.4 percent.

The earnings per share are approximately $2.

The closing price on the previous trading day was $28.10.

The stock price has increased by 6 percent thus far this year.

The bid-ask spread is $.300.

5. Which one of these methods uses accounting values rather than financial values?

AAR

PI

Discounted payback

NPV

IRR