A downward sloping (inverted) yield curve indicates that a. Investors like taking risk b. Long-term interest rate is higher than short-term interest rate c. Demand for long-term bonds are lower d. Investors accept lower return on long-term bonds than short-term bonds

Which of the following project should be accepted assuming 7% required rate of return? a. A project that has -100 net present value b. A project that has 6% internal rate of return c. A project that has -10 profitability index d. A project that has 9% internal rate of return

When market interest rates exceed a bond's coupon rate, the bond will: a. sell for less than face value. b. sell for more than face value. c. decrease its coupon rate. d. increase its coupon rate.

Other things equal, a firm's sustainable growth rate could increase as a result of: a. increasing the plowback ratio. b. increasing the payout ratio. c. decreasing the return on equity. d. increasing total assets.