6. 7. 8. 9. 10. homework

Fall 2019 FINC 3350 Financial Institutions and Markets 6. A 15-year corporate bond pays $40 interest every six months. What is the bond's price if the bond's promised YTM is 5.5 percent? A) $1,261.32 B) S1,253.12 C) S1,250.94 D) S1,263.45 7. An annual payment bond with a $1,000 par has a 5 percent quoted coupon rate, a 5 percent promised YTM, and five years to maturity. What is the bond's duration? A) 4.12 years B) 4.55 years C) 4.80 years D) 5 years 8. The interest rate used to find the present value of a financial security is the A) expected rate of return. B) required rate of return. C) realized rate of return. D) realized yield to maturity. 9. You are evaluating a company's stock. The stock just paid a dividend of $1.5 Dividends are expected to grow at a constant rate of 5 for long time into the future. The required rate of return (Rs) on the stock is 12 percent. What is the fair present value? A) $21.43 B) $22.50 C) $25.00 D) $26.25 10. Which of the following statement is not the main function of the Federal Reserve System? A) Conducts monetary policy. B) Supervises and regulates depository institutions. C) Maintains the stability of the financial system. D) Regulating securities exchanges