22-

Ahmad Company is contemplating selling of 5 million worth of 15 years, 8% coupon bond each with par value of $1000. Floating cost is $30 and the selling price of $650. Work out the cost of this bond

Select one:

a. .031

b. 0.33

c. 0.31

d. 0.13.

23-

Although no investment is truly risk free, ________ are generally viewed as the closest thing we can come to in the real world to a risk-free investment.

Select one:

a. U.S. Treasury securities

b. zero-coupon bonds

c. secured bonds

d. AAA-rated corporate bonds

24-

As a key participant in financial transactions, individuals are ________.

Select one:

a. net suppliers of funds because they save more money than they borrow

b. net users of funds because they save less money than they borrow

c. net demanders of funds because they save more money than they borrow

d. net purchasers of funds because they save more money than they borrow

25-

Assume that a security is fairly priced and has an expected value of return of 0.14. The market expected rate of return is 0.11 and the risk-free rate is 0.03. The beta of the stock is

Select one:

a. 0.95

b. 1.356

c. 3.175

d. 1.375