13.

You sell short 100 shares of Loser Co. at a market price of $45 per share. Your maximum possible loss is

a.

unlimited

b.

$4500

c.

zero

d.

$9000

14.

You sold short 300 shares of common stock at $55 per share. The initial margin is 60%. At what stock price would you receive a margin call if the maintenance margin is 35%?

a.

$35.22

b.

$40.36

c.

$51.00

d.

$65.18

15.

The reinvestment rate assumption is more important when

a.

the shorter the time to maturity and the lower the coupon rate

b.

the longer the time to maturity and the higher the coupon rate

c.

the shorter the time to maturity and the higher the coupon rate

d.

the longer the time to maturity and the lower the coupon rate

16.

What is the yield-to-maturity of a $1,000, 7% semi-annual coupon bond that matures in 2 years and currently sells for $997.07?

a.

7.04%

b.

7.16%

c.

7.31%

d.

6.87%